North Dakota Tax Commissioner: Cannabis Taxes Could Reach $7.28M Every Two Years

North Dakota’s tax commissioner estimates that adult-use cannabis taxes in the state could reach $7.281 million every two years based on a 5% sales tax rate, the Associated Press reports. The proposed ballot measure does not include a tax rate – a decision that will ultimately be left to lawmakers. 

During a discussion last week with Tax Commissioner Brian Kroshus and a panel of lawmakers, Steve Bakken, who is leading the initiative to legalize cannabis in the state, presented estimates for tax revenue, based on data from six other states, extrapolated for North Dakota. He estimated annual revenues between a low of $7.65 million and an average of $19.46 million. 

The measure included on ballots will include financial estimates, and the legislative panel approved estimates of $10.3 million in revenue, $8.3 million in expenditures, and an “undetermined amount” of other costs related to “behavioral health and social impacts.”  

The panel approved other potential expenses related to adult-use cannabis legalization, including a one-time $4 million expenditure estimated by the state Highway Patrol for oral fluid screening devices that would have to be purchased over the next two years to test for cannabis impairment during traffic stops. Republican state Sen. Kyle Davison called the estimate “just overkill on a fiscal note.”

Republican Rep. Ben Koppelman added that including the fiscal note “feels like we’re packing this to be negative,” adding that he’s “not a proponent of” the reforms, “but we need to be fair.”

North Dakotans will consider legalizing cannabis for adult use for the third time this November. Voters have twice before rejected similar proposals, in 2018 and 2022.