Australia is Punting Away $250 Million a Year in Tax Revenue by Not Legalizing Cannabis Says New Study

June 12, 2023 ·

Australia Is Missing Out On At Least $250 Million Each Year That Cannabis Isn’t Legalized, Says New Report

Canada and Uruguay have long legalized marijuana.

Is Australia next?

Unfortunately, Australia seems to be delaying cannabis legalization and each year that they don’t they are losing out on $250 million. As of now, legislation has been introduced by the Greens to parliament with the hopes of legalizing pot around the country. The legislation is still out for public consultation though should it be given the green light, it would allow cannabis to be sold and regulated for adult use throughout the countries. In doing so, it would join the many US states who have done so successfully, as well as several other nations.

According to a new report released by the University of Western Australia, the state alone could see profits upward of $243 each year in the first five years cannabis is legalized. The revenue was quantified by calculating incomes made from legalizing pot, taking into consideration the frequency and form that marijuana is consumed plus the costs incurred by enforcing laws. The report, entitled “An Economic Case to Legalise Cannabis in Western Australia”, was put together also using data from several sources including the Australian Crime Commission, the Australian National Drug Strategy Survey, the National Drug and Alcohol Research Centre of the University of NSW, and the Australian Criminal Intelligence Commission. 

“We wanted to find out the actual truth on this, and we commissioned this not expecting any particular result,” explains Dr. Brian Walker, leader of the Legalise Cannabis WA Party, who authorized the report. “This is the first time anyone has shown their working, and set out exactly how their figures were arrived at,” he told ABC Radio Perth’s Nadia Mitsopoulos.

“On the spending side we’ve got stuff like your police – for chasing a cannabis crime – the courts and the corrective services for managing that. Altogether, that’s about $100 million per year,” he adds.

Additionally, they considered estimated figures to see potential income from taxes conservatively. The researchers state that it could be safe to assume a 25% tax on recreational cannabis, resulting in a cool $137 million of direct tax revenue in WA alone, should annual sales reach around $686 million. Then there is also the income from licensing fees from businesses who want to sell marijuana, which could inject some $5.6 million annually.

The State Of Cannabis In Australia Now

As of the time of writing, it’s illegal to grow, possess, sell, or consume marijuana. However, just like in the United States, the law is different from one territory and state to another.

Depending on the location in Australia, there are fines for various amounts of cannabis found in possession. The only exception is in the Australian Capital Territory, where residents can legally own as much as 50g of cannabis for adult-use without the need for a prescription. Everywhere else, cannabis possession without a doctor’s prescription can set you back on a fine anywhere from a few hundred to a few thousand dollars, and the risk of going to jail.

But since 2016, medicinal cannabis has been legal. Registered doctors are allowed to prescribe cannabis in several different forms to treat many health conditions. Opponents of legalization in Australia feel that it’s actually far too easy to get your hands on medical marijuana, and that the situation has become far too liberal.

And according to 2019 data, there were around 600,000 Australians who were already consuming medical cannabis. These figures come from a report conducted by the Lambert Initiative, though these numbers have already increased significantly especially given the quantity of doctors who have been lining up to register and prescribe pot.

“There’s been a dramatic increase in the number of prescriptions issued for medicinal cannabis in the past two years,” explains Professor Iain McGregor, the Lambert Initiative for Cannabinoid Therapeutics’ Academic Director, as per a University of Sydney article . “But we have good evidence that the number of people using cannabis to treat ailments is substantially higher than this,” he adds.

Medicinal cannabis is one thing, and adult-use is another. The cannabis legalization bill of the Greens could “provide for the registration of cannabis strains, the regulation of cannabis and the establishment of the Cannabis Australia National Agency.” A national cannabis licensing scheme as well as a regulator would be established, both of whom would play important roles in overseeing grow operations and sales around the country.

Furthermore, the bill would make it legal to grow a maximum of 6 cannabis plants at home. Businesses can also sell pot to licensed businesses, such as cafes or dispensaries. Much of it will be similar to the model already in place in Canada.

It isn’t enough to legalize just medicinal use cannabis, and just like we have observed in other countries, it’s causing more harm than good. “Law enforcement is spending billions of public dollars failing to police cannabis, and the opportunity here is to turn that all on its head by legalizing it,” said Greens Senator, David Shoebridge.


It’s clear that economically and politically speaking, decriminalization of cannabis is the way to go. This is what is working for other countries, and even the public thinks so. Keeping cannabis illegal has proven to be harmful for the community – and expensive for law enforcement. Nobody wins. It’s high time that Australia legalizes adult-use cannabis already. (Full Story)

In category:International
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