Should Government Legalise and tax Cannabis?

The arguments for and against the legalization of cannabis and the taxation of the good by the government.

Legalising cannabis and placing a tax on the good has several advantages

Advantages of legalising cannabis

1. The Government can raise revenue from the tax. Because demand is likely to be inelastic, the tax revenue could be quite high. The tax revenues could be used to help finance health care and treat lung cancer. (things associated with dope-smoking)


2. It would reduce size of black economy
. If cannabis was legalised it would reduce criminal activity. It would also free up police time to investigate more serious crimes and drug use.

3. Taxing cannabis coul prevent ‘Over Use’ Although cannabis might be legalised it is advisable to still discourage consumption through taxation. Cannabis can be considered a demerit good because

  1. People underestimate dangers of smoking (long term memory loss, increased risk of psychosis)
  2. Smoking has negative externalities. Dope smokers are less productive when stoned. Increased risk of accidents if driving when stoned.

Therefore we make people pay the social cost of cannabis by taxing the good. This can achieve social efficiency and should reduce the overconsumption of cannabis.

4. Prevent dangerous Forms of Cannabis

On the black market, people don’t know what they are buying. People often buy cannabis but end up with drugs that are mixed with more potent forms of skunk – which can be much worse for your mental health. Legal cannabis could be restricted to the milder form which causes less psychotic episodes than skunk.

5. Reduce police time

Legalising cannabis would free up police time to spend on more profitable use of time like chasing burglars. Legalising cannabis would also prevent many, otherwise, law-abiding citizens breaking the law.

6. Reduce the power of criminal gangs

The legalisation of cannabis would be bad news for criminal gangs who make money from selling it. Also, people who want to buy cannabis would then be able to do it without meeting criminals who may use selling cannabis as a gateway to other drugs.

Arguments Against legalisation of Cannabis / Dope

  • If tax is too high people may still consume on the black market. Therefore there will be tax evasion, the government will not get the money and criminal activity will continue. (It is already a real problem for cigarettes)
  • May encourage the dope tourist, like in Amsterdam – they will spend money in the UK but is it the kind of tourist we want to encourage? However, with more countries considering to legalise cannabis, this issue of a dope tourist will probably be relatively minor
  • Legalisation may encourage more people to consume cannabis because it is now considered to be acceptable. Cannabis still has many negative effects on health – especially long-term mental health. Cannabis is a demerit good – where people may underestimate the personal costs of smoking.
  • Some argue that if you decriminalise cannabis, it could encourage consumption of other more dangerous drugs like ecstasy. However, it could work the other way, because if cannabis is legalised people could buy dope from a respectable shop rather than a drug dealer.

Also referred to as: Cannabis / marijuana / hemp / weed / dope / grass

See also:

27 thoughts on “Should Government Legalise and tax Cannabis?”

  1. i loooooooooooooooooooooooooooovvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvveeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
    weed its the best thing thats happend in my life so make it so i can have it in the street and talk to the pigs to

  2. i spent 3 years in holland working,i must say that they have a more relaxed way of living and there country is better than ours at the moment..LEGALISE THE HERB.herbs are good for you,i will not stop growing just because of our pompus goverment…….

  3. we are in hard times with the trade market i smoked since i was like 16 on and off and it s like having a pint wen i smoke a joint and i was in the army for 4 yrs came off all drugs neva drank was in afganistan with afgan army dudes smokin round me and i was neva tempted too smoke so its not addictive .

    like the 15 yr old says u make it more tempting by making it illegil they need too get rid of the posion herion rather worrie aboot sum stoner wee the muchies

    sorry for spelling but im relly high 😛

  4. Ha! This is EXACTLY why legislation of this nature will never see the light of day. Nobody with two brain cells can be bothered to put together an intelligent argument for or against the subject.

    “just to say all you none weeders are stupid” – come on man, did it take you all day to come up with that argument? srsly

    There are many economic reasons as to why legalizing marijuana would be helpful, especially in today’s struggling economy. The problem is do those reasons, as numerous as they may be, outweigh the dumbass factor that seems to be present among the majority of it’s consumers? Discussions such as this one really leave me with doubt…

  5. Legalise weed its good and there would be alot less crime rates.



  7. i love weed i smoke it everyday i get up on the microphone and hit it with the deejay 😉
    i love ittt
    im telling you i just love it cant get over it i loveeee ittt im telling you its amazing i mean sitting on your own and ripping a bong its amazing im telling you !!!
    i justtttttt love ittttttt
    when i grow up i want to be a weed plant i love it that much 🙂

  8. i love weed i smoke it everyday i get up on the microphone and hit it with the deejay 😉
    i love ittt
    im telling you i just love it cant get over it i loveeee ittt im telling you its amazing i mean sitting on your own and ripping a bong its amazing im telling you !!!
    i justtttttt love ittttttt !!!!!!!!!!!!!!11
    when i grow up i want to be a weed plant i love it that much 🙂

  9. Why would we be worried about a tourist crossing our shores for a spliff on his 3 day trip abroad?? We dont seem to worry about letting people who want to blow us all up live here !!
    The moneys raised could go straight into fighting disease and more addictive drugs.
    I dont know if anyone agrees??
    But im thinking if you went to Tesco to buy a 10 bag, the cashier wouldnt try blagging me into buying a few pills and a gram of coke !!
    But where we all buy our weed from we are instantly put in direct contact with the option of buying Coke and Pills… ( most cases the one man can get it all )
    This has more to do with 1 drug leading to another in my eyes.. AVAILABILITY!!
    When i was 13 and i had a spliff or 2 i didnt think.. Oh i need to try coke now!!
    But when i was 13 i was buying off a guy who only had skunk for sale.. as most of you were!! As you got older , you were buying off a guy who had other things available, because he got older and got more contacts.. Suddenly the conversation after i bought the 10 bag went something like,, oh ive got nice coke too if you want to try it !
    Yes the social circle plays a massive part and there are so many different scenarios..
    But i cant see how legalising it cant help!
    The rise in users would be minimal if any.. the police time free’d up would be Big if not Massive!!
    Unfortunately tho im thinking it wont be legalised..
    Its more likely that Cigs and Alcohol will be made illegal.. 🙁

  10. carl: i love drugs

    ^what an extremely intelligent post.

    Upside: If THC based products became legal then the government would be able to spend their resources battling drugs that are a lot more dangerous than cannabis, I mean cigarettes are legal but they are extremely dangerous for your health and they put so much strain onto the health system.

    Downside: Ridiculous amount of tax.

  11. Cannabis Law Reform (CLEAR) has published a report from the Independent Drug Monitoring Unit (IDMU) that shows a tax & regulate policy on cannabis could produce a net benefit to the UK economy of £6.7 billion per annum.

    This estimate is made from a detailed study of the size of the UK cannabis market, potential tax revenues, criminal justice system savings and additional costs of regulation including health information and education.

    Almost overnight the UK could enjoy a boost to its economy that is the same as the entire annual budget for the Department for Culture, Media and Sport, twice the budget of the Department for the Environment, Food and Rural Affairs and three times the budget for the Department of Energy and Climate Change.

    Without any new laws or any change in existing law, ministers could move this huge market out of the black economy and into legitimate businesses producing thousands of new jobs.

    Evidence from the US and Europe shows that a regulated system would also reduce all health and social harms, better protect children as well as permitting enormous gain from the medicinal and therapeutic benefits of cannabis.

    Alongside the IDMU report, CLEAR has published “A CLEAR Plan for the Regulation of Cannabis In Britain” which sets out detailed proposals for a regulated system.

    Key points from the report “Taxing the UK Cannabis Market” include:

    – 30% of all adults use cannabis in their lifetime

    – The downgrading of cannabis to class C in 2004 led to a decline in consumption but a dramatic increase in police action with seizures up 50% between 2004 and 2005.

    – The upgrading of cannabis back to class B in 2009 led to an increase in consumption.

    – There are 2.7 million regular users of cannabis in Britain (daily – monthly use).

    – Regular users of cannabis use an average of 10 grammes per week.

    – Approximately three tonnes of cannabis is consumed in Britain every day.

    – Total value of UK cannabis market approximately £6 billion p.a.

    – Approximately 300,000 people grow their own cannabis in Britain.

    – Expunging existing cannabis criminal records of approximately one million people would result in additional income tax revenue of £200 million p.a.

    – Proposed cannabis inspectorate with 2620 staff, 100+ offices and £200 million annual budget.

    – Proposed automatic custodial sentence for supplying to minors.

    – Criminal justice system savings estimated at £512 million p.a.

    – Net benefit to the UK economy estimated at £6.7 billion p.a.

    Download “Taxing the UK Cannabis Market”:

    Download “A CLEAR Plan for the Regulation of Cannabis In Britain”:

    CLEAR is a registered UK political party which aims for an end to the prohibition of cannabis and the urgent availability of medicinal cannabis on a doctor’s prescription. It advocates a safer, more responsible policy of regulation which would reduce all health and social harms, better protect children and contribute billions to the UK economy.

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