A ‘demand side’ estimate of the dollar value of the cannabis black market in New Zealand

The dollar value of an illicit drug market is an important statistic in drug policy analysis. It can be used to illustrate the scale of the trade in a drug; evaluate its impact on a local community or nation; provide an indication of the level of criminality related to a drug; and can inform discussions of future drug policy options. This paper calculates the first ever demand side estimates of the New Zealand cannabis black market. The estimates produced are calculated using cannabis consumption data from the Alcohol & Public Health Research Unit's (APHRU) 1998 National Drug Survey. The wholesale value of the market is estimated to be 81.3-104.6 million dollars a year, and the retail value of the market is estimated to be 131.3-168.9 million dollars a year. These demand side estimates are much lower than the existing supply side estimates of the market calculated using police seizures of cannabis plants. The retail figure is four times lower than the lowest national supply side estimate (636 million dollars) and seven times lower than the highest national supply side estimate (1.27 billion dollars). The demand side estimates suggest a much smaller cannabis economy to fuel organized criminal activity in New Zealand than previous estimates implied.