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The Government’s coffers could be winners if cannabis is legalised.


The Government’s coffers could be winners if cannabis is legalised.

Work by the NZ Institute of Economic Research (NZIER) shows a legal cannabis industry could raise about $490 million per year in tax, including GST.

Legalisation of the drug will be put to the vote in a non-binding referendum in September.

A tax on a legal cannabis industry has been calculated at 25 per cent.

NZIER principal economist Peter Wilson said the projected tax-take on cannabis was only an estimate.

There was not a lot of information in New Zealand about cannabis use.

Wilson said NZIER used more detailed information from Canada and Colorado, which provided detail on just how many people actually consumed cannabis.

”The key insight from that is that heavy users do actually consume a lot of this product and we assumed that our use and distribution is the same as Colorado and scale that for population and said that if that is the case then how much would be sell in a legal market and we came up with the round number of 1100 tonnes.”

”To achieve the full $490m per year in tax revenue, our modelling assumes that legal cannabis will need to displace the illegal market entirely.”

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