The UK could earn £1 billion a year in tax revenues if it legalised cannabis, according to a think tank.

Many will be hoping that incentive proves too irresistible for the Government and it decriminalises the Class B drug soon.

The Institute for Economic Affairs (IEA) claimed around £2.6 billion worth of cannabis was being sold on the black market in Britain each year, with more than three million people using the drug.

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The government could earn £1b if it legalises cannabis (Picture: Getty Images)

Even former Conservative leader Lord Hague thinks laws should be looked at (Picture: Getty Images)

The think tank argued in its report, Joint Venture: Estimating the Size and Potential of the UK Cannabis Market, that legalising cannabis would have other positive knock on effects.



It claimed the police and other public services would be freed up more if weed was not illegal and would save the organisations around £300m annually.

The report said: ‘When added to tax revenues of £690 million, plus new streams of income tax, business tax and VAT created by the legal industry, claims about cannabis legalisation providing a £1 billion windfall to the Treasury seem pessimistic.’

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Charlotte Caldwell and her son Billy at Heathrow Airport (Picture: PA)

Chris Snowdon, head of lifestyle economics at the institute, said the UK should follow Canada and areas in the USA by legalising the drug and described it as a ‘win-win-win’.

Legalisation has also got support from former Conservative leader Lord Hague in recent weeks after epilepsy sufferer Billy Caldwell’s cannabis oil treatment was confiscated at Heathrow Airport.

Home Secretary Sajid Javid eventually intervened to allow the 12-year-old the drug.

He wrote in the Telegraph: ‘Everyone sitting in a Whitehall conference room needs to recognise that, out there, cannabis is ubiquitous, and issuing orders to the police to defeat its use is about as up-to-date and relevant as asking the Army to recover the Empire.

‘This battle is effectively over.’

The Government has said it will review the medicinal use of cannabis but underlined it would remain prohibited for recreational use.

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