If cannabis is legalised after this year's referendum, it could see up to 5000 new jobs created in the sector and bring in more than $1 billion in taxes, according to two newly released reports.
The Business and Economic Research Limited (BERL) report was commissioned by the Ministry of Justice and was proactively released to media today .
It recommends a limit of 110 to 120 tonnes of dried cannabis produced per annum - a significant increase on its current modelling, which estimates around 74 tonnes of cannabis is currently consumed each year in New Zealand.
"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," the report says.
On top of that GST income, it also forecasts around $640 million from excise tax and $440 million from a specific harm reduction levy.
Massey University associate professor Dr Chris Wilkins says more work still needs to be done to straighten out the proposed Cannabis Legalisation and Control Bill.
In total, it would mean more than $1 billion a year coming in from taxes on legalised cannabis.
Meanwhile, the report also estimates around 420 stores would be spread around the country, with more than a quarter of them in Auckland, reflecting its higher population.
It predicts the cost of cannabis would remain competitive with current black market prices, at around $20 per gram.
"This is very high by international standards, though with a high illegal price currently in New Zealand, this is expected to be competitive with the illegal market," the report says.
Across the production, processing and retail sectors associated with cannabis, legalisation is forecast to create up to 5000 new jobs.
The modelling also suggests around 3000 fewer cannabis convictions each year, saving the justice sector millions of dollars.
NZ Drug Foundation's Ross Bell says the reports show the proposed bill was created with "rigorous analysis".
"These reports show the Government has structured the legal cannabis market in a way that makes sense economically while also improving health and social equity outcomes," he says.
The report contains a disclaimer that while it was commissioned by the Ministry of Justice, "ther views do not necessarily reflect the views of the Ministry of Justice or the New Zealand Government".
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