Israel’s cannabis market has the potential to completely transform the economy, with the country expected to pull in an estimated $1.8 billion every single year, should the industry be legalized in its entirety.

Taxes will not be paid on this amount, but if the green plant is legalized fully for medical and recreational use, distribution and sale, cannabis legalization in Israel could potentially be worth $675 million in annual tax revenues. This is according to the Jerusalem Institute for Market Studies (JIMS).

Based on the potential economic benefits exposed by the recent study, JIMS has encouraged complete legalization across the country. Since cannabis legalization has not been associated with increased traffic incidents and crime, the move could be wholly positive for Israel, which has been described as “the world epicenter of medical cannabis research.”

Israeli government can save money if cannabis is legalized

It’s not just the impressive tax revenue that makes cannabis legalization in Israel a worthwhile choice but also, the money the government could be saving on court fees and police enforcement.

If the plant becomes legal for sale and distribution, the substantial tax revenue will contribute to the government budget by a whopping $707 million, as an annual cost of $54 billion is shaved off of government expenditure.

Although cannabis has not yet been legalized in Israel, the black market is currently yielding major profits. Josef Tagar of JIMS claims that the illegal cannabis industry is valued at an annual amount of $170 billion; a figure that is constantly growing.

“Regulation of the cannabis market will improve the allocation of resources in the economy from a macroeconomic point of view,” is an excerpt from the JIMS study.

The current status of cannabis legalization in Israel

Compared to other Western countries, the number of cannabis users in Israel is the highest. In 2017, the Israeli Anti-Drug Authority published the findings of a study on cannabis use among Israel’s adult population, revealing that 27 percent of Israelis aged 18-65 had consumed cannabis in the last year.

Decriminalization of cannabis was put into effect in Israel back in March 2017. However, this does not mean that the industry is legal quite yet. Anyone who is found to be smoking weed or consuming cannabis by other means in a public place will be slammed with a fine. That’s the rule for first-time offenders.

Should the people of Israel be caught using cannabis more than once, they may have their driver’s license suspended and be ordered to attend educational and/or rehabilitation programs. Prosecution and lengthy prison sentences will be the outcome for fourth-time offenders.

Medical cannabis development in Israel

Since the 1990s, medical cannabis use has been permitted in Israel and as of 2016, approximately 26,000 medical cannabis patients were officially registered. By 2018, this figure is predicted to double. Thankfully, the Israeli government are poised to pass new regulations that will enable cannabis cultivators to legally export their buds for medical use. When this happens, the tax benefits will ensue.

A global front-runner in medical cannabis research and development (of which is financed by the government,) Israel has welcomed cannabis research from over 50 U.S. organizations, with $125 million being poured into the country’s cannabis operations in 2016.

Numerous cannabis products available in today’s cannabis market have been produced/developed in Israel, including the world’s first ever metered dose cannabis inhaler – the Syqe Inhaler Exo.

Time will tell whether or not cannabis legalization in Israel moves forward, but we can be certain of the benefits it will have on the country as a whole. From the termination of illegal groups and the black market, to a surge in tourism, medicinal research and employment opportunities, there are many reasons to give the healing herb a green light (in addition to the looming tax boom.)