NCJ Number
196912
Journal
Drug and Alcohol Review Volume: 21 Issue: 2 Dated: June 2002 Pages: 145-151
Date Published
June 2002
Length
7 pages
Annotation
This document provides a calculation of a demand side estimate of the cannabis black market in New Zealand.
Abstract
An estimate of the New Zealand cannabis black market is particularly relevant since a Parliamentary Select Committee is reviewing public health strategies to reduce the harm of cannabis, including its legal status. The available evidence of the scale of the illicit cannabis trade suggests it is significant. Recent estimates of the cannabis black market have varied from $1 billion to $3 billion a year for the national crop. The methods of producing these estimates are ineffective because (1) there is no way of knowing what the cannabis seizure rate is; (2) the price ranges and plant yields used in the calculations are optimistic; (3) not all the cannabis plants under cultivation will have a market value; and (4) these methods assume all the cannabis cultivated is sold on the black market. The alternative to estimating the dollar value of an illicit drug market is the “demand side” approach, which draws on the total amount of a drug reported consumed in a population level drug survey to estimate the size of the black market. The total amount of cannabis reported consumed in the Alcohol & Public Health Research Unit’s (APHRU) 1998 National Drug Survey is used to calculate the cannabis market. The secrecy that surrounds the illicit trade in cannabis means it is not possible to calculate directly the dollar value of the black market. Findings show that the demand side estimates are much lower than the existing supply side estimates of the market. The demand side estimates suggest a much smaller cannabis economy to finance organized criminal groups in New Zealand than previous estimates imply. This may be a factor in the observed low levels of corruption by organized criminal groups. The ongoing monitoring of the value of the black market provides a useful indicator of changes in the total revenue available to organized criminal groups over time; and can be used as an indirect measure of the success of law enforcement agencies in suppressing the cannabis trade. The estimation of the dollar value of illicit drug markets can provide valuable information to policy makers and law enforcers. 3 tables, 35 references