A concerted push has been underway to legalize cannabis for adult use in Australia, including in the Australian state of Victoria. According to a new report compiled and published by the Penington Institute, permitting legal adult-use cannabis sales could create a significant number of new jobs in the area.
“Legalising cannabis for adult use could generate nearly $2 billion in government revenue and create more than 17,000 jobs over the next decade, according to economic modelling commissioned by the Penington Institute.” stated Cannabiz in its original reporting.
“The research, conducted by consultancy firm Sapere, estimated a regulated market would contribute $10 billion to Victoria’s gross state product in 10 years.” the outlet also reported. “By the final year of the modelling period, annual government revenue was projected to reach $316 million, primarily through licensing fees and payroll tax.”
Cannabiz also included polling data in its article, pointing out that 57% of polled Victoria residents support allowing adults to make legal purchases of regulated recreational cannabis products. Currently, only Uruguay and Canada permit nationwide adult-use cannabis product sales, although Uruguay limits purchases to residents only.
Malta, Luxembourg, Germany, South Africa, and the Czech Republic have all also adopted national adult-use cannabis legalization measures, although current European Union agreements limit recreational cannabis commerce to research-based pilot trials and noncommercial cannabis associations. South Africa is expected to eventually permit legal recreational sales at a national level, but has yet to institute an adult-use commerce regulatory framework.
Regional adult-use cannabis commerce pilot trials are currently operating in several jurisdictions in the Netherlands and Switzerland, and nearly two dozen states in the U.S. have adopted legalization models that permit adult-use sales. Adult-use cannabis remains prohibited at the national level in all three countries.
Australia’s Parliamentary Budget Office (PBO) previously estimated that a legalized domestic adult-use cannabis market would generate $28 billion in tax revenue in the first decade. Although researchers at The Conversation “think the PBO’s estimate is too high, and based on the current patterns of cannabis use, $13 billion is a more credible estimate.”
The Conversation estimates “that a new legalised market could attract 3.4 million cannabis users in its first year” and that “Australia consumes 441 tonnes of cannabis per year.”
The researchers at The Conversation note that the “Parliamentary Budget Office supposes a price of $16.95 per gram, of which $3.55 would be tax – 10% GST and 15% excise” and that the “Australian Criminal Intelligence Commission (ACIC) estimates that one gram typically costs $22.50.”
However, The Conversation indicates that “we base our estimated tax revenues on a retail price of $12 per gram, of which $2.51 would be tax” and using those figures is how they arrived at the $13 billion figure.