Legalizing cannabis in Germany could have a positive fiscal impact of over 4.7 billion euros per year, according to a study by Professor Justus Haucap from the Düsseldorf Institute for Competition Economics. The study found that legalizing cannabis would result in additional tax revenue and reduced costs for law enforcement and the justice system. The Ampel coalition, consisting of the FDP, Greens, and SPD, is likely to form the next federal government and has expressed support for legalizing cannabis.
The study found that legalizing cannabis would generate significant revenue for the government through regulation and taxation of the cannabis market. The estimated revenue would be 1.8 billion euros per year, with an additional 735 million euros from corporate, trade, and sales taxes, 526 million euros from social security contributions, and 280 million euros from income tax. The study also predicts the creation of 27,000 new jobs in the cannabis industry.
Professor Haucap used data from countries where cannabis has already been legalized, along with survey data on cannabis consumption in Germany, to estimate the additional tax revenue. The study also found that legalizing cannabis would result in significant cost savings for law enforcement and the justice system, totaling 1.05 billion euros and 313 million euros, respectively.
The study’s author argues that the current policy of prohibition has failed to reduce drug use and that legalizing cannabis would improve consumer safety, facilitate addiction prevention, and reduce the burden on law enforcement and the state budget. The Ampel coalition’s support for legalizing cannabis suggests that the issue will be a priority for the next German government.
