Can economy gain from legalizing pot?
Study suggests making marijuana legal in Israel will end black market, generate $450 million annually
Using estimates based on current black market demand, and using tax rates equivalent to those on tobacco cigarettes, the legalized sale of marijuana would generate over $260 million in government revenue.
Add to that an estimated savings of $198 million worth of law enforcement costs attributed to marijuana use currently deemed illegal, and the move to legalization could generate in excess of $450 million annually.
The study, done by the Jerusalem Institute for Market Studies and published last week, reported that the Israeli black market for cannabis is worth over $700 million annually, and was contributed to by about 275,000 adult consumers. Estimates of possible tax revenue were made using these numbers.
In a survey of public opinion that provided the data used to complete the study, around 75% of respondents agreed that there are legitimate medicinal uses for marijuana. However, support for legalization of recreational use was only 26% - half of what was found in the US by a similar study completed in March 2013, where public support of marijuana legalization was 52%.
When asked if knowing that legalization would generate a significant increase in tax revenue, 14.1% of respondents said they would "be very likely or likely to reconsider their position."
Yarden Gazit, a co-author of the survey, was quoted as saying that "recognizing the enormous financial gains that would come from legalization demands that the government take a serious look at the proposal to legalize cannabis use under specific guidelines."
He added, "There is no disputing that if the public is able to get past the wholly negative misperceptions associated with marijuana usage and appreciate the potential benefits with limited social or health care costs, this is an idea that needs open-minded and serious re-examination at this time."
The survey, consisting of 500 representative respondents, was conducted by the Jerusalem-based firm Kevoon, and has a sampling error of 4.5%.
Reprinted with permission from Shalom Life
