North Dakota lawmakers met to discuss the financial impact of legalizing recreational marijuana, in light of an upcoming ballot measure in November. The debate revolved around estimating sales tax revenue and the overall costs of legalization, including social impacts and potential state agency expenses not outlined in the measure.
Tax Commissioner Brian Kroshus provided a rough estimate of $7.281 million in sales tax revenue every two years based on a 5% rate, but acknowledged the speculative nature of the figure. The ballot measure does not specify a tax rate, leaving that decision to the Legislature.
Advocates of the measure presented their own revenue projections, citing an average annual income of $19.46 million from six other states, with a low estimate of $7.65 million. The legislative panel approved estimates of $10.3 million in revenue, $8.3 million in expenditures, and additional costs related to behavioral health and social impacts.
The discussion delved into specific expenses, such as the State Highway Patrol’s projected $4 million expenditure on oral fluid screening devices in anticipation of increased marijuana usage on roadways. Lawmakers questioned the necessity of such a significant expenditure, with some expressing concerns about bias in the cost estimation process.
Senator Jerry Klein noted that for many voters, revenue may not be the determining factor in their decision on the marijuana legalization measure. North Dakota has previously rejected similar measures in 2018 and 2022, while 24 states have already legalized recreational marijuana. The panel also assessed a potential $3.15 billion two-year cost for the state if voters approve a measure to eliminate local property taxes based on assessed value, requiring replacement revenue for local governments.
