If recreational cannabis gets the green light in the New Zealand referendum, it could be worth $1 billion per year in tax to the NZ Government.
The Business and Economic Research Limited (BERL) report commissioned by the Ministry of Justice recommends a limit of 110 to 120 tonnes of dried cannabis to be produced per annum.
The report states: “Using the suggested minimum prices of $20 for low THC products, $30 for medium THC products, and $40 for high THC products, it is likely that a total of $335 million in GST will be raised by the sale of 110 tonnes of recreational cannabis.”
In addition to GST revenue, the report forecasts the legalisation of cannabis would generate $640 million in excise tax and $440 million from a specific harm-reduction levy.
In total, it would mean more than $1 billion a year coming in from taxes on legalised cannabis.
The report predicts the cost of cannabis would remain competitive with current black market prices, at around $20 per gram.
In addition to the tax revenue raised, the report found that the legalisation of cannabis would potentially result in around 5,000 new jobs in production, processing and retail.
Another benefit would be a reduction in spending on the criminal justice system, with 3,000 fewer cannabis convictions each year.