Photo courtesy of Chris Wallis // Side Pocket Images.

Legalizing and taxing marijuana for adults in the United Kingdom would earn the country an estimated £1.5 billion in tax revenue and government savings each year, according to researchers at a pro-regulation advocacy group.

That sum includes £1 billion in tax revenue and £300 million in criminal justice savings in areas such as policing, prosecution, courts, legal aid and prison spending, according to the report from the Transform Drug Policy Foundation.

Legalization also stands to create more than 15,500 full-time-equivalent jobs and eradicate most of the country’s illicit cannabis trade, the study found.

The 53-page report, “High Returns: The Economic Benefits of UK Cannabis Legalisation,” was published on Monday. It bases its estimates on trends observed in other jurisdictions that have legalized marijuana.

The paper analyzes three competing models of legalization and regulation, ranging from a commercial cannabis market with state oversight to a nonprofit model built off home cultivation and membership-based associations.

All three models would be preferable to prohibition, authors said.

“Making cannabis illegal has been a generational failure, it has undermined public health, criminalised millions of people, wasted taxpayer money, and is increasingly unpopular with the public,” report co-author Ester Kincová said in a statement. “This Government needs to follow the sensible moves by countries across the world from Canada to Germany, and responsibly regulate and tax our cannabis market, rather than leave control, and profits, in the hands of organised crime groups.”

A for-profit model, similar to what’s in place in Canada and some U.S. jurisdictions, would make the most money for the UK government, bringing in an estimated £1.23 billion in tax revenue and saving £284 million in criminal justice costs. Commercial retailers would operate under a state monopoly designed to ensure strong public health oversight and avoid market consolidation.

Compared to other approaches, report authors noted that the state-run commercial model would maximize government revenue but also limit competition and innovation.

A more limited approach, built off home cultivation and membership-based associations, would bring in far less tax revenue—an estimated £345 million—and create fewer than half the full-time-equivalent jobs (7,000). It would mean lower criminal justice system savings of roughly £174 million.

But that model—based off programs in Spain, Uruguay, Germany and Malta—would also make for fewer regulatory costs and would avoid the profit-based incentives of a commercial program.

On the other hand, it would also be less likely to displace the illicit market, with the report estimating that it would replace just 45 percent of illegal distribution.

A hybrid model would attempt to blend the other two approaches by including home cultivation, nonprofit marijuana associations as well as regulated commercial retail.

Estimated tax revenue under that model would be £1.1 billion—slightly lower than the state-run commercial approach—but also create an estimated 15,525 full-time-equivalent jobs. Like the state-run approach, it would capture a projected 80 percent of the illicit market within five years and save the criminal justice system £284 million.

In terms of upsides, authors said the hybrid model would better balance revenue generation with public health safeguards. Licensing schemes and tax spending could also better redress harms stemming from prohibition, though the use of social equity programs.

Downsides of the hybrid model, however, include a higher risk of market consolidation, greater chances of emerging monopolies and stronger corporate sway that could compromise policy and health goals.

Steve Rolles, a report co-author and senior policy analyst at Transform Drug Policy Foundation, said it is “long past time for the UK Government to grow up—deal with reality—and begin an adult debate on how legalisation and regulation of cannabis can deliver for the UK.”

“There are many powerful arguments for ending the generational failure and injustice of cannabis prohibition, but the economic arguments have particular salience in the current political debate,” Rolles said. “£1.5 billion in annual income could fund 18 million more GP appointments, free school meals for all the UK primary schools, or reverse the cut in winter fuel payments for pensioners.”

While the Transform Drug Policy Foundation report emphasizes the economic impacts of legalization, a summary of the report emphasizes that those “are secondary to public health and social justice policy priorities.”

Among those, the report notes that legalization would also mean “safer, responsibly labelled, quality/dosage controlled products” and also allow for more emphasis on “targeted risk education and proven health interventions”—including prevention, harm reduction and treatment—rather than criminal prohibition.

Legalization could also enable officials to repair the historic harms of the war on drugs, which the report says have been “disproportionately carried by socially and economically marginalised communities, in particular the Black community.”

“This can be achieved through proactively facilitating participation of impacted communities in emerging markets, and targeted reinvestment of cannabis revenues,” the paper says.

Removing penalties and clearing past criminal records would also “alleviate the long-term economic harms of criminal records, impacting life opportunities and economic prospects for those impacted.”

Even years-old cannabis criminal records can foreclose education, housing, employment or other opportunities.

The new Transform Drug Policy Foundation report comes just over a year after the organization published a guidebook looking at possible avenues to regulating psychedelics, including psilocybin, LSD, DMT and mescaline.

The 124-page document, titled “How to Regulate Psychedelics: A Practical Guide,” detailed four main tiers of psychedelics regulation. It advises against treating drugs like any other consumer product, for example by limiting advertising and establishing guidelines for who can supervise facilitated use. Transform has previously published similar guides around cannabis, cocaine, MDMA and amphetamines.

“Regulating risky products and behaviors is just one of those things that governments around the world have been doing for generations, for centuries. And in many ways, they’re very good at it,” Rolles said at the time. Governments already weigh risks and benefits of all sorts of things, he noted, including pharmaceuticals, dangerous sports, consumer electronics, building materials and more.

“What Transform’s done with this book, and a lot of our work historically,” he added, “is just apply that regulatory logic and that regulatory scholarship to a set of products and behaviors that have historically existed outside of regulatory thinking because of the madness of the war on drugs.”

The four tiers of proposed psychedelics regulation begin with what’s essentially noncommercial legalization, allowing for home cultivation, foraging and not-for-profit sharing. It echoes the “grow, gather, gift” model advocated by many local psychedelics reformers in the U.S.

As the tiers progress, they involve more interventions by regulators, such as through licensing and antimonopoly protections.

Rolles said he believed the four tiers could “operate happily in parallel” to accommodate a variety of circumstances and cultural practices. Regulators might permit home cultivation or foraging of psilocybin mushrooms, for example, while also regulating facilitated use of LSD or DMT at commercial facilities.

Transform’s psychedelic guidance came on the heels of a coalition of international advocates calling for an end to prohibition and instead for the legalization and regulatation all drugs. That report, produced in partnership with the National Coalition for Drug Legalization (NCDL), Students for Sensible Drug Policy (SSDP) and Law Enforcement Action Partnership (LEAP), argued that “a legal and regulated market for drugs is likely to produce less dangerous outcomes for both society at large and the individuals who choose to consume drugs.”

A separate 2023 report by the International Coalition on Drug Policy Reform and Environmental Justice attacked the global drug war from an entirely different perspective, arguing that prohibition has ravaged critical ecosystems, undermined efforts to combat climate change and caught up vulnerable populations in a cycle of poverty and prosecution.

All three documents came amid a changing global mindset around substances. A United Nations agency report in September highlighted human rights concerns raised by the war on drugs, urging member states to shift from punitive drug-control policies to an approach rooted in public health. Dealing with drugs as a criminal problem, it said, is causing further harm.

That same year, the government of Scotland, which is part of the UK, said that the war on drugs had “failed” and that it was time to decriminalize currently illicit substances, while promoting harm reduction services like overdose prevention centers.

“These are ambitious and radical proposals, grounded in evidence, that will help save lives,” Drugs and Alcohol Policy Minister Elena Whitham said at the time. “We want to create a society where problematic drug use is treated as a health, not a criminal matter, reducing stigma and discrimination and enabling the person to recover and contribute positively to society.”

Separately, U.S. Sen. John Kennedy (R-LA) last month blasted UK Prime Minister Keir Starmer, telling him to “put down the bong” and “stop dipping into your ketamine stash”—a response to a UK agreement to turn over authority of a British territory where a joint military base is stationed.

Kennedy has repeatedly suggested that the decision was made under the influence of cannabis and ketamine—despite the UK leader’s opposition to marijuana and drug policy policy reform.

A week earlier, Kennedy similarly said of Starmer that “He needs to put down the bong.” Moments later, however, he said, “I don’t mean any disrespect,” and added that he “shouldn’t have said the ‘bong’ part. I take it back.”

The use of stigmatizing language around cannabis use isn’t especially surprising coming from Kennedy, who has opposed even modest marijuana reform proposals—including the Biden administration’s rescheduling push.

Photo courtesy of Chris Wallis // Side Pocket Images.

Ben Adlin via (https://www.marijuanamoment.net/the-uk-could-earn-1-5-billion-in-annual-revenue-and-savings-by-legalizing-marijuana-report-finds/)

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