If the UK introduced a system similar to that used in established US state cannabis markets such as Colorado and Washington, it could generate an income of as much as £2.26bn in taxes and licence fees, according to report by Health Poverty Action.
Moreover, if the tax income it generated in the UK was similar to that currently in the Netherlands, then this would be around £1.4bn, the report said.
But if the cannabis market worked more like the alcohol or tobacco markets in terms of tax income, the income brought by cannabis duties could be “conservatively” estimated at £1.9bn or up to £3.5bn.
The report said that, whilst it is unknown how the market would respond to regulation and what regulatory model would be used, a legal recreational cannabis market would bring at least £1bn annually.
This £1bn was the equivalent of the basic salaries of all midwives in England, the report noted, with some left over.
“We would not know precisely until we tried it, but the emerging evidence from the US is that reasonable tax contributions and mitigating other health risks is possible,” it said.
Legalising cannabis would also save a total of £291m across the police, court, prison and probation services in England and Wales, money that could be spent targeting more serious and violent crimes.