North Dakota Lawmakers Approve Fiscal Note For Marijuana Legalization Ballot Initiative, Estimating $10.3 Million In Revenue

North Dakota lawmakers are divided over how to estimate revenue and expenses for the state if voters approve a marijuana legalization initiative on the ballot this November—but a legislative panel has landed on a projection of $10.3 million in revenue for the 2025-2027 biennium if the reform is enacted.

North Dakota Legislative Management met on Friday to finalize a fiscal impact statement for the legalization measure that voters will see on the ballot. There was some debate over whether expense estimates—including a $4 million earmark for oral impaired driving technology that law enforcement said they will be requesting—painted a negatively skewed picture of the economics of the reform.

New Economic Frontier, the campaign behind the cannabis initiative, also said that they believe the projected $10.3 million in revenue is “just the minimum.” And to that point, the estimates were at least partially speculative, with an assumed tax rate of five percent for marijuana sales, even though the legislature will still need to decide on that component of the market if the measure passes.

Legislative Management took testimony and asked questions of representatives of the Department of Health and Human Services, Highway Patrol and Department of Transportation. State officials concluded that, beyond the projected revenue, they also anticipate $8.3 million in expenses, in addition to an “undetermined amount” of additional costs attributed to “behavioral health and social impacts.”

The $4 million price tag for saliva-based testing equipment for police was called into question during the meeting, with Sen. Kyle Davison (R) saying it seems like “overkill” to include it in the ballot fiscal note given that the law that voters are deciding on doesn’t require it.

Rep. Ben Koppelman (R) added that “it feels like we’re packing this to be negative,” as the Associated Press reported. While he made clear he doesn’t support the measure, he floated the idea of eliminating “a good chunk of” the law enforcement expenses and adding $3 million in the revenue category.

Despite the conflicting estimates, New Economic Frontier said the finalization of the estimate showing over $10 million in revenue “is a huge win for our cause.”

“As we approach the November ballot, it’s clear that legalizing adult-use could provide significant revenue for our state,” the campaign said. “Let’s make history together this November 5th. Your vote can help North Dakota join the 24 states that have already legalized!”

The Legislative Management hearing took place just weeks after North Dakota Secretary of State Michael Howe (R) certified that organizers behind the legalization initiative had collected enough valid voter signatures to put the measure on November’s ballot.

New Economic Frontier said last month that they submitted more than 22,000 voter signatures. They needed at least 15,582 valid signatures to qualify the proposal and officials ultimately validated 18,964 signatures.

A recent poll suggests organizers have their work cut out for them, however, with a majority of likely North Dakota voters opposing the cannabis measure as activists neared the finish line to collect enough signatures for qualification.

Under the new legalization measure, adults 21 and older would be able to possess up to one ounce of marijuana flower, four grams of concentrate and 300 milligrams of edibles that they could buy from a limited number of licensed dispensaries. Adults could also grow up to three plants for personal use, with a six-plant cap per household.

The state Department of Health and Human Services or another agency designated by the legislature would be responsible for regulating the program. Regulators would need to establish rules to implement the law by October 1, 2025.

The new proposal would limit regulators to approving licenses for up to seven cannabis manufacturers and 18 retailers. There are also provisions meant to avoid creating intrastate monopolies, such as limiting licensees to no more than four dispensaries.

Currently, there are eight medical cannabis dispensaries operating in North Dakota. The initiative requires regulators to develop separate application processes for those businesses to become dual licensees and non-existing companies that wish to become recreational operators.

Unlike other legal states, the proposal in North Dakota doesn’t appear to contain criminal justice reform components favored by equity advocates such as expungements or licensing prioritization for people harmed by the drug war. It also doesn’t seem to contain any references to a proposed tax scheme for legal sales.

New Economic Frontier filed its initiative with the state and formally launched the campaign in April.

Police in the state are divided on the proposal, according to local media reports.

As for neighboring states, is already legal in Montana and Minnesota, and it will be on the ballot in South Dakota in November.

In 2021, North Dakota’s House approved a marijuana legalization bill sponsored by Rep. Jason Dockter (R), but it was ultimately defeated in the Senate after advancing through committee.

Following that defeat, some senators devised a new plan to advance the issue by referring it to voters on the 2022 ballot. The resolution moved through a key committee in 2021, but the Senate also blocked it.

There have been repeated attempts by activists to enact legalization in the Peace Garden state over the years.

Advocates with the separate group North Dakota Cannabis Caucus started collecting signatures to qualify a constitutional amendment legalizing cannabis for the 2022 ballot, but they did not gather enough by deadline.

New Approach ND previously led an effort to place a legalization measure on the 2018 ballot that was defeated by voters. They filed another initiative for 2020, but signature gathering complications largely caused by the coronavirus pandemic got in the way.

North Dakota voters approved a medical cannabis ballot measure in 2016.

Last year, North Dakota’s governor signed a bill allowing patients admitted to hospice care to self-certify as medical marijuana patients.

The North Dakota House of Representatives also approved a resolution last year that encourages residents to buy U.S. flags that are made out of hemp and manufactured in the state.

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Photo courtesy of WeedPornDaily.