Legalising cannabis could earn the UK up to £3.5bn a year, a new study has claimed.

Health Poverty Action, an international development organisation, claims that legalising the class B drug would have many benefits, including extra revenue to fund the NHS.

The study estimated levels of tax income assuming the hypothetical cannabis market worked in a similar way to the UK alcohol and tobacco markets in terms of taxation.

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It said a “conservative” estimate of yearly cannabis duties would be nearly £2bn if the drug were taxed at the same level as alcohol, or £3.5bn if tobacco taxation levels were applied.

The study also references US states that have decriminalised cannabis, stating that "Colorado – with a population only slightly larger than Scotland – raised $247m (£179m) from new cannabis taxes and licence fees in 2017 alone".

Legalisation potentially leading to an increase of young people using the drug is also addressed in the study.

"The early indications from the US states where the newly regulated markets are most developed, are that teenage use of cannabis has not risen as opponents of legalisation had feared, whilst at the same time new cannabis taxes are bringing in vital revenues to help fund public services," the study's authors say.

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The argument that legalisation decriminalises a 'gateway' drug is also addressed. The study says: "Regulation could reduce the ‘gateway’ opportunity for criminal suppliers to additionally market more risky (and more profitable) drugs to consumers."

And the study points out that decriminalising cannabis will take money away from drug dealers and allow the substance to be safely regulated.

Health Poverty Action suggests: "We could regulate or limit potency (or nudge people towards using safer products through tax/pricing), reduce the use of adulterants and limit the quantity of heavy metals, pesticides or other harmful products that make it into the final product, ensuring the safety of cannabis users."

Martin Drewry, Director of Health Poverty Action, said: “This week Canada will become the first G7 country to vote to legalise and regulate cannabis, it is clear that the war on drugs has failed and that responsible regulation protecting public health is the way forward.