Today was a big day for the cannabis law reform organisation “CLEAR”, due to the unveiling of a report written by the Independent Drugs Monitoring Unit (IDMU) concerning the tax raising potential of a regulated cannabis trade and CLEAR’s proposals for a regulated regime for cannabis which took place in a full meeting room in Parliament. What follows is a very quick summation of both reports, do read the originals.

The IDMU report is called “Taxing the UK cannabis market” (read it here) and consists of an examination of the UK market in terms of its  its size and turnover,  a break down of the domestic “skunk” production, the Tax and revenue raising potential  and the new costs which might arise.

The IDMU estimates the number of cannabis users to be between 1.8 and 3.6 million. That’s quite a range and reflects the first big problem caused by prohibition, we can’t directly measure what’s going on because it’s all illegal so the best anyone can do is estimate (guess) a figure based on arrest figures.  For something that is so common and which the government claims is a big social problem, it’s mind blowing that no-one really knows just how many people use cannabis, but that’s prohibition for you!

With the aid of the IDMU’s user surveys, they calculate how much cannabis is used per year

The total size of the cannabis market can thus be estimated by multiplying the estimated numbers of experimental/occasional and regular/daily users by their average annual consumption. The annual volume of cannabis consumption is thus estimated between 622 tonnes and 1407 tonnes per annum

And this market is in large part (approx 65% – two thirds) supplied by UK growers

The number of growers is thus estimated at between 150000 and 504000, with a best average estimate of 290000

On tax raising potential the IDMU calculate

Taxing cannabis at a rate of £1 per gram per 5% THC would have the potential to raise gross duty revenues between £2.5Bn and £6.9 Bn per year, with an average of £4.9 Bn. Clearly a potency-based duty system would have the potential to raise the greatest levels of revenue and ensure a price differential between low potency and high-potency preparations.

Of course it would all be subject to VAT

annual VAT revenues would vary between £581 Million and £1.7 billion per annum, with an average of £1.17 Billion.

Plus income tax generated from workers in the trade

additional income tax revenues in the region of £200 million per annum.

If home growers were licensed this would also raise an income for the treasury of around 58 – 116 million pounds per annum, depending on the regime.

There would be new costs and of course quite a few cost savings and overall the IDMU estimate

Overall the net benefit to the taxpayer of a taxed and regulated cannabis market could range from £3.4 Billion to £9.5 Billion per annum, with a best estimate of £6.7 Billion per year at recent market levels.

That’s not a figure to be sneezed at.

As a response to this, CLEAR has published a plan for the regulated cannabis market, which you can read in the document “A CLEAR Plan for the Regulation of Cannabis in Britain” (read it here), the underlying objective being:

1. To minimise all health and social harms of cannabis, particularly the involvement of organised crime.
2. To protect children and the vulnerable through age restrictions, responsible retailing, health education and information.
3. To maximise the therapeutic and medicinal benefits of cannabis
4. To promote quality, safety and the development of cannabinoid science.

Broadly speaking the proposal is to treat the cannabis trade in a similar way to that applied to alcohol, so licensed outlets and  suppliers with an age limit for sales of 18. There would be regulation of strength and cannabinoid content.

Perhaps the most controversial proposal for domestic (hobby) growers is the idea of licensing. Unlike with alcohol where home production of beer and wines (but not distilled spirits) is totally unrestricted providing it’s not for sale, CLEAR is proposing a £120pa  licence, which would include electrical safety checks. Domestic cultivation would be limited to

1000 watts of artificial lighting.

and

In addition, under natural light a maximum of six mature plants would be permitted. Also included would be a separate propagation area for cuttings and seedlings of up to one square metre.

There would be a limit of two licenses per houshold and no sales of home grown would be permitted.

This is the first time a serious proposal for a regulated cannabis trade, backed up with some solid research, has been proposed. It’s bound to upset some but it’s a good start and hopefully will get people talking. Prohibition is costing us more than our liberty, it’s hitting our pockets as well, the more people know about that, the more likely this madness will come to an end.

It’s been quite a day for CLEAR, well done to all involved.

CLEAR website www.clear-uk.org