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.
The study also found that legalization would create over 15,500 jobs equivalent to full-time and eliminate most of the illicit cannabis trade in the United States.
A 53-page study entitled, High Returns: Economic Benefits of UK Cannabis Legalisation was published Monday. Estimates are based on other countries that have legalized pot.
The paper examines three different models of regulation and legalization. They range from an unregulated commercial market under state control to a non-profit model that relies on membership and home cultivation.
The authors stated that all three models are preferable to prohibition.
“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. The government should follow countries around the globe, from Canada to Germany. They need to regulate and tax the cannabis market responsibly, instead of leaving control and profits in the hands organised crime groups.
💷TAX REVENUE & SAVINGS ACROSS THE CRIMINAL JUSTICE SYSTEM:
A legal cannabis market could produce up to £1.5B net benefit for the Treasury annually through tax revenues & reduced criminal justice costs
2/🧵 pic.twitter.com/538IoEjhg1— Transform Drug Policy Foundation (@TransformDrugs) March 4, 2025
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. State monopoly for commercial retailers is designed to maintain public health standards and prevent market consolidation.
The report’s authors note that, compared to alternative approaches, the model of state-run commerce would increase government revenues but limit innovation and competition.
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.
A report estimated that only 45 per cent of the illicit distribution would be replaced.
The hybrid approach would combine the two other approaches, including both home-grown marijuana and nonprofit marijuana associations with regulated commercial sales.
Job Creation:
Up to 15,500 full-time jobs could be created in cultivation, manufacturing, retail & related services, (depending on the model implemented).
4/🧵 pic.twitter.com/8rMmVVadrT— Transform Drug Policy Foundation (@TransformDrugs) March 4, 2025
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.
The hybrid model, according to the authors, would be a better way of balancing revenue generation and public health protections. Through the implementation of social equity initiatives, licensing and tax expenditures could help to reduce harms resulting from prohibition.
The hybrid model has some downsides, including a greater risk of consolidation of markets, a higher chance of emerging monopolies, and heightened corporate influence that can compromise health and policy 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.”
Rolles noted that while there are many strong arguments in favor of ending cannabis prohibition and the generational injustice it has caused, the economic arguments were particularly relevant to the political discussion at the moment. “£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.”
The Transform Drug Policy Foundation’s report does not only focus on the economic impact of legalization. A summary states that these are “secondary to the public health and social injustice 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.
The report states that legalization would also allow officials to correct the historical harms caused by the drug war, which have “disproportionately been carried” by the socially and economic marginalised groups, especially the Black Community.
This can be done by encouraging communities to participate in new markets and reinvesting cannabis revenue strategically.
The removal of penalties and the clearing up past criminal records will also help “reduce long-term harms from criminal records that impact life chances and economic prospects.”
The criminal record of cannabis possession, even if it is many years old, can still prevent access to education, housing and employment.
Transform Drug Policy Foundation’s new report is just a little over a month after it published its guidebook on possible regulatory avenues for psychedelics including LSD, DMT and Mescaline.
This 124 page document, titled How to Regulate Psychedelics – A Practical Guide”, detailed the four main tiers for psychedelics regulatory. The document warns that drugs should not be treated like other products, such as by restricting advertising or defining guidelines on who is allowed to supervise the facilitation of use. Transform previously released similar guides on marijuana, cocaine, MDMA andamphetamines.
The governments of the world regulate risky behaviors and products for many generations. “They’re good in many aspects,” Rolles told the audience at that time. He noted that governments already consider the risks and benefits associated with a wide range of products, such as pharmaceuticals, hazardous sports, consumer electronic devices, building materials, and other items.
He added that “Transform has done a lot with our historical work, which is to apply this regulatory logic, that regulatory scholarship, to a number of products and behavior that were historically outside the regulatory thinking due the the madness that was the drug war.”
Four tiers are proposed for psychedelics regulations. The first is a non-commercial regulation, which allows for foraging, home cultivation and sharing without profit. The model used by many psychedelic reformers across the U.S. is “grow-gather-gift”.
The regulator’s role increases as the levels progress.
Rolls stated that he believes the four levels can “operate happily in parallel”, to suit a wide range of cultural and social practices. The regulators could, for instance, allow the home-cultivation or foraging of mushrooms containing psilocybin, while also restricting LSD, DMT, or other facilitated drugs at commercial establishments.
Transform released its psychedelic guide after a group of advocates called for an end of prohibition. Instead, they advocated for legalizing and regulating all drugs. The report, which was created in collaboration with the National Coalition for Drug Legalization(NCDL), Students for Sensible Drug Policy(SSDP), and Law Enforcement Action Partnership (“LEAP”), argued “a legalized and regulated market for drug consumption is likely produce less hazardous outcomes for the society and individuals.”
In a separate report from 2023, the International Coalition on Drug Policy Reform and Environmental Justice took a different approach to the drug war, saying that it has destroyed critical ecosystems and undermined attempts to fight climate change. They also claimed that this prohibition is trapping vulnerable people in poverty and incarceration.
These three documents all came at the same time as global attitudes towards substances were changing. In a report released by the United Nations in September, it highlighted concerns about human rights raised by drug wars and urged member states to move away from punitive policies on drugs to a public health-based approach. It said that treating drugs as criminal problems is only causing more harm.
The government of Scotland (part of the UK) said in the same year that the “war on drugs” had failed and it was now time to decriminalize illicit substances while also promoting harm-reduction services such as overdose prevention centres.
Elena Whitham was the Minister of Drugs and Alcohol at that time. She said, “These proposals are radical and ambitious, but they’re backed by evidence and can save lives.” Drugs and Alcohol Policy Minister Elena Whitham said at the time that she wanted to “create a culture where problematic drug abuse is treated as health and not criminality, thus reducing stigma, discrimination and helping people to recover in order to contribute to society positively.”
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.
Kennedy had said the same thing about Starmer a week before: “He should put down his 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.
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Side Pocket Images. Image courtesy Chris Wallis.