Study Says Cannabis Legalization Could Net Western Australia $243.5 Million

A newly released study found that legalizing marijuana could be a major economic boon for Australia.

ABC Radio Perth reports that the study, conducted by the University of Western Australia, found cannabis legalization could bring Western Australia $243.5 million a year in the first five years.

According to the newspaper, “the study quantified the revenue the state could generate from legalizing cannabis” and “considered data on the form and frequency of cannabis use, as well as the estimated costs of enforcing current laws prohibiting cannabis use.”

“We wanted to find out the actual truth about this and we commissioned this without expecting any particular outcome,” Brian Walker, chairman of the Legalize Cannabis WA Party, the group that commissioned the report, told ABC Radio Perth.

“This is the first time anyone has shown how they work and detail how their numbers came about. On the spending side, there are things like your police force—for the prosecution of a cannabis crime—the courts and the law enforcement agencies that deal with it. In total, that’s about $100 million a year.”

Cannabis is illegal in Australia, with penalties varying from state to state. In Western Australia, according to the Guardian, “[f]Penalties range from $2,000 to $20,000 and are punishable by up to two years in prison [law enforcement] may invite the individual to a counseling session (one for adults, two for children) at their own discretion.”

Walker told ABC Radio Perth: “When you get involved in something illegal, there is a price to pay. How do you account for the losses when you’ve been mugged and lost a million dollars in crops? All of this comes at a cost. Once you legalize, that risk premium goes away.”

ABC Radio Perth has more background on the study: “Data for the report – An Economic Case for Legalizing Cannabis in Western Australia – came from a variety of sources including the Australian National Drug Strategy Survey, the Australian Crime Commission and the Australian Criminal Intelligence Commission and the National Drug and Alcohol Research Center at the University of NSW. The report, which examined projected numbers for a five-year period after legislation, concluded that a modest 25 percent tax on adult-use recreational cannabis in WA would generate approximately $137 million in direct tax revenue would generate, based on approximately $686 million in annual revenue.’ Royalty for companies looking to sell cannabis would bring an estimated $6.5 million into the economy each year.”

The legalization of cannabis in Australia could soon move from the theoretical realm to actual politics. The Greens, the smaller party in Australia, said last year that the country’s constitution empowers Parliament to override states and legalize recreational marijuana.

According to the Guardian, the Greens’ proposal would “allow the regulation and sale of legal recreational cannabis strains in Australia, joining the few countries (and US states) that have already taken steps towards legalization.”

“Green Senator David Shoebridge plans to submit the bill to the Senate once the party has considered the outcome of this consultation,” the Guardian reported last month. “To get anywhere, the bill would need the backing of the Government and Labor has not yet shown any sign of putting its weight behind the legislation.”

As the Guardian explained: “according to the Constitution [in Australia]states are responsible for criminal justice,” but Greens “believe that once cannabis was legalized at the federal level, the Commonwealth would have the power to create a national, legal cannabis market.”