Report: Legalization of marijuana would bring Israel NIS 1.6 billion in tax revenue, budget savings

Report: Legalization of marijuana would bring Israel NIS 1.6 billion in tax revenue, budget savings

Published on 10/2/13

Legalization of marijuana in Israel could be a gold mine for the state coffers, bringing in as much as NIS 1.6 billion in tax revenues and savings for law enforcement, according to a new report released on Wednesday.

According to the study by the Jerusalem Institute for Market Studies (JIMS), legalization would save police and the courts some NIS 690 million in annual costs, and bring the state NIS 950 million in tax revenue.

The savings for the state coffers in terms of law enforcement are due to the fact that, according to the report, each year there are over 18,000 criminal cases involving marijuana, over 70% of them involving amounts that are for “personal use” and that a total of 5.2% of criminal cases in Israel involve marijuana charges. Furthermore, the report states that some 5.4% of all inmates in Israel are serving time for marijuana-related charges.

The economic figures in the report are based partly on estimates that they make that if marijuana was to be legalized, usage would increase from 24.7 tons in Israel per year to 30.7 tons, and that the price would drop from NIS 100 per gram to NIS 59. From this they calculated that the sales would bring in NIS 1.81 billion shekels, as opposed the NIS 5.4 billion in taxes raised from cigarettes and the NIS 790 million from alcohol sales.

The poll, which questioned 500 Jewish Israelis in July 2013, found that while only 26% of Israelis support marijuana legalization and that 64% are opposed, when respondents were taught more about the issue, over 50% said they’d support legalization.

The report, which only dealt with marijuana and not any “hard drugs”, found that only 14.5% of Israeli Jewish adults had tried marijuana, and that around 270,000 Israelis had used marijuana over the past year.

The level of support for marijuana legislation is connected to political affiliation, the report states, with 75% of Meretz voters saying they are in favor, while only 15% of Likud voters and 10% of National Torah Judaism voters support legalization. As a whole, secular Israelis were much more likely than Haredi Israelis – 38% versus 4% for Haredis and 18% for national religious Israelis.

In addition, men were polled s more likely to support legalization than women, 34% to 25%.

Despite the somewhat tepid support for legalization, the report's findings state that 75% of Israelis believe there are legitimate medical uses for marijuana.

The report found that the main reasons respondents said they oppose legalization are that they believe it would increase use of marijuana, including among youths, increase crime, and lead to a rise in “drug tourism” to Israel.

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