As North Dakotans prepare to head to the polls in November to vote on the Proposition 3 marijuana legalization initiative, they rely on their state government to come up with an estimate of what it will cost taxpayers. It's not just this initiative—state law mandates that voters be informed of the potential budgetary impacts of any measure on the ballot.

But for voters to accurately assess the cost of a measure, the cost estimates must reflect reality. That's not the case with the cost report issued last week by the state's Office of Management and Budget (OMB) and approved in a party-line vote over the objections of Democratic lawmakers.

The OMB report put the cost of implementing the marijuana measure at $6.7 million, but two-thirds of that figure is to pay for a program not mandated in the initiative. OMB said it would take $2.2 million in clerical costs to expunge some 18,000 marijuana arrest records, as the initiative requires, but that it would also cost $4.4 million for a youth education campaign that the state Health Department argued would be necessary and the salaries of two full-time employees to run it for the next four years.

The Health Department may think such a campaign is necessary, but the initiative itself does not require—or even mention—any such campaign, and to include the Health Department's wish list in the measure's fiscal impact statement is just plain dishonest. That didn't stop Republican lawmakers from voting to approve it.

Democrats tried to stop them. House Minority Leader Corey Mock (D-Grand Forks) offered an amendment to approve the fiscal impact statement but omit the Health Department’s figures, with other costs to be determined.

"This does not lead to a $6.7 million fiscal impact. It’s a $2.2 million fiscal impact, with more that’s likely to happen but it cannot be determined," Mock said. "It will cost more than $2.2 million. We just don’t know how much."

The amendment failed on a 10-5 party line vote. The Legislative Management Committee then approved by the same margin a motion by House Majority Leader Al Carlson (R-Fargo) to accept the fiscal impact statement with the Health Department's cost estimate included.

Sen. Erin Oban (D-Bismarck) told the Bismarck Tribune after the vote that the fiscal impact statement as passed amounted to a lie.

"There seems to be a disagreement among this committee about what we want versus what the language in the measure actually says," Oban said. "I think there was universal agreement, probably around this table, about wanting, if Measure 3 passed, an education campaign from the health department about the impacts of marijuana, especially on youth, for prevention purposes. But the measure does not require that. To me, it is lying to claim that Measure 3 required that because it didn’t."

One Republican lawmaker, Sen. Jerry Klein (R-Fessenden), defended including the Health Department costs on rather dubious grounds.

"Until the measures are passed, and the Legislature and all the agencies can dig in and put an actual cost on it, I think our job has been simply to approve something that somebody said might cost this," Klein told the Tribune.

The Health Department argued that because it has a responsibility to protect the health and welfare of North Dakotans, the educational campaign would be warranted, but again, it is not mandated in the initiative itself, and the Health Department doesn't exactly have a great record when it comes to marijuana measures.

As North Dakota columnist and political blogger Rob Port pointed out in a column laying into the shady cost estimates, the Health Department was way, way off in its estimate of the costs of the successful 2016 medical marijuana initiative there.

"What people should keep in mind is that two years ago when the health department presented their information on what they estimated to be the cost of medical marijuana if it passed they said $8.7 million," he quoted one lawmaker as telling him after the vote. "For fiscal year ending June 30, 2018, their actual cost was $363,000."

That inflated figure didn't stop voters from approving medical marijuana in 2016. Perhaps the inflated figure this year won't stop voters from approving marijuana legalization in 2018, but it would be better if North Dakota Republicans could just be honest about the costs.

The Trump administration has included vaping devices and their components among the Chinese products subject to punitive tariffs, and that's going to have an impact on the marijuana industry. But it's not just vaping devices: Many other products made in China, from fixtures to packaging materials and more that are used in the pot industry, are also subject to increased tariffs.

The bottom line will be increased costs for legal marijuana companies and increased prices for their customers. To the degree that tariffs subdue growth in legal marijuana markets, they could also end up putting a hit on marijuana tax revenues for states and localities.

Companies selling vaping products are on the front line, said Arnaud Dumas de Rauly, co-CEO of the Blinc Group, which develops and sells technology and products related to vaping and runs an incubator program to research, develop, and brand technologies for marijuana and nicotine vaping. Dumas de Rauly made his comments in July 24 testimony at public hearings on the tariffs held by the Office of the U.S. Trade Representative.

The vast majority of vaping devices, as well as batteries, filters, and cartridges, are manufactured in China, Dumas de Rauly noted, and there are currently few alternatives for producing them. But the profit margin on such devices is only 10 to 15 percent, and that means companies will either have to find alternative sources, eat the hit to their bottom lines, or, more likely, pass the increases on to consumers.

And that will have an impact on the "entire cannabis consumption market -- including medical and recreational marijuana," Dumas de Rauly said.

It's not just consumers who will feel the impact, Dumas de Rauly warned. Higher prices mean decreasing sales and shrinking tax revenues and "25 percent of sales come from cannabis vaping products," he said.

The business press, which now actually treats the marijuana business as a real industry, found plenty of people who echoed Dumas de Rauly's sentiments. In an interview with Forbes, Brooke Davies, executive director of Cannabis Organization of Retail Establishments, a non-profit trade association representing cannabis retailers in Washington State, said that tariffs were already having an impact. Small growers there, already under pressure from dropping marijuana prices, will see profit margins shrink even further because the glass jars they buy from China to package their buds are being hit by tariffs.

"The Trump tariffs will undoubtedly hurt the rural parts of Washington State," Greg James, publisher of Marijuana Venture and Sun Grower magazines, told Forbes. "There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop," he said.

It's not just growers or vaping companies taking a hit. "Any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price," Kevin Hagan of the Princeton Public Affairs Group told Forbes.

Meanwhile, CNBC reported that unlike other sectors targeted for tariffs, such as imported steel, aluminum, solar panels, and washing machines, whose impacts are slower to show up (how often do you buy a washing machine?), the tariffs on vaping products will have an almost immediate impact. That means consumers will quickly see price increases and adjust their behavior accordingly.

But for some people -- medical marijuana patients -- marijuana isn't a luxury, but a necessity.

"For those who need it, they don't have a choice," Mary Lovely, a professor of economics at Syracuse University and nonresident senior fellow at the Peterson Institute for International Economics in Washington, D.C., told CNBC.

Maybe they can comfort themselves by reading Donald Trump's tweets. As he exclaimed in a tweet the same day as the Office of U.S. Trade Representative hearings, "Tariffs are the greatest!... All will be Great!"

This article was produced by Drug Reporter, a project of the Independent Media Institute.

California is on track to generate $1.9 billion in legal marijuana sales this year, according to new data from a financial analysis firm tracking the market. That's a lot of weed, but it's only half the amount the same firm previously estimated the state would rake in.

The estimates are from New Frontier Data, which crunches cannabis industry numbers, and are based on tax revenues from pot sales, which so far have fallen dramatically short of projections. According to New Frontier, the state collected $33.6 million in pot taxes between January 1 and March 31, which makes it extremely unlikely that tax revenues will meet original expectations of hitting $175 million in the first half of the year.

New Frontier had earlier estimated that the state would see $3.8 billion in marijuana sales this year, and this latest estimate slashes that number by a whopping 50%. The company also slashed its projections for the size of the legal industry by 2025. Instead of the $6.7 billion in sales it earlier estimated, it now says it thinks sales will only hit $4.7 billion, a hefty one-third reduction.

That's bad news not only for state tax revenues but also for an industry that is supposed to be coming in out of the cold. What happened? New Frontier has an idea.

"It is quite clear that the new adult use regulations have made it more difficult than anticipated for the legal market to get established and for consumers to transition to from the illicit market. Given the number of local government bans on cannabis businesses, we are not seeing the same kind of conversion rates that we have seen in other legal markets," said Giadha Aguirre De Carcer, New Frontier Data founder, and CEO.

State and local licensing fees for marijuana businesses can range from $5,000 to $120,000 per year, depending on the type and scope of the business. And complying with regulatory mandates, such as those around zoning, water usage, and lab testing, costs even more.

It's not just onerous -- and expensive -- regulation for those who want state licenses to grow, distribute, and sell marijuana that's the problem. There's also a serious lack of buy-in by a good portion of the state's cities and counties, and that means that a big hunk of the state has no access to local legal marijuana.

"If there's (no governmental support) locally, then there's no option for a state license, and that's why most people are being shut out at this point in time," California Cannabis Industry Association executive director Lindsay Robinson told the Marijuana Business Daily. "The process gave local authorities an option to kind of sit on their hands, and that's the biggest barrier that we're seeing."

According to CCIA spokeswoman Amy Jenkins, only about a third of the state's 540 local governmental entities have approved commercial marijuana activity. Lack of legal access is "forcing consumers to turn to the illicit market," she told the Los Angeles Times this week.

Or return to it. Or stay in it, if they never left. Humboldt State University economics professor Erick Eschker pegged the size of the state's pot market -- legal and illegal -- at about $7.8 billion. Of that, about $2.3 billion came from the medical marijuana market, leaving about $5.5 billion for legal, grey market, and black market pot sales. If the legal market is only accounting for $1.9 billion in sales, that suggests that grey and black market sales are still about twice the size of legal sales. These consumers don't get hit with stiff sales and excise taxes, and if they can still get it from the guy down the street, why pay those high, state-legal prices?

If California wants to eliminate the black market in marijuana, it's got a whole lot of work to do. And no matter what steps the state takes to deal with its internal black market, there's still the export black market to the non-legal states in the rest of the US. Ultimately, the only way to end the black market is to legalize it nationwide, but we're not quite there yet. In the meantime, California's transition to a legal marijuana regime is facing some unhappy realities.

Canada's Liberal Party formally endorses drug decriminalization (although Justin Trudeau is keeping his distance), the State Department cites continuing human rights concerns in the Philippines drug war, a Utah medical marijuana initiative appears set to make the November ballot, and more.

Marijuana Policy

Kirsten Gillibrand Says Time to Legalize Marijuana, Calls on Sessions to Meet With People Busted for Pot. The junior senator from New York and potential Democratic presidential contender said Sunday the time has come to legalize marijuana and that she had sent a letter to Attorney General Jeff Sessions inviting him to discuss the impact of the drug war with New Yorkers who have been denied jobs, housing, and college financial aid because of non-violent drug crimes. She also called on Sessions to reinstate the Cole memo, the Obama administration's policy of largely leaving state-legal marijuana alone.

Idaho Democratic Gubernatorial Contenders Split on Marijuana Policy. One Democrat running for governor wants to legalize marijuana; the other does not. In a Sunday night debate on Idaho Public Television, contender Paulette Jordan said she fully supports legalization and cited the tax benefits for the state. Boise businessman AJ Balukoff, who is also seeking the nomination, disagreed. He said he is opposed to the substance and believes medical marijuana needs to be properly tested. Idaho is one of four states in the country that has not passed any form of marijuana law reform, not even a CBD medical marijuana law.

Albuquerque Decriminalization Went into Effect on 4/20. New Mexico's largest city has now decriminalized the possession of less than an ounce of marijuana. The change went into effect last Friday after a measure was passed by the city council and signed by Mayor Tim Keller. Possession remains a crime under state and federal law.

Medical Marijuana

Utah Initiative Appears Set to Qualify for November Ballot. A medical marijuana initiative from the Utah Patients Coalition looks very likely to qualify for the November ballot. While it won't be official until May 15, petitioners appear to have met the overall signature requirement, with 145,000 registered voter signatures in hand, well above the 113,000 required. But the initiative also must meet specific signature thresholds in each of the state's 29 state Senate districts. As of last Friday, they had done so in 26 of them.

Foreign Policy

State Department Says Drug War Killings Remain Top Philippines Human Rights Concern. In its global rights report for 2017, the State Department said drug war killings and rising police impunity remain the top human rights concerns in the Philippines. "Extrajudicial killings have been the chief human rights concern in the country for many years and, after a sharp rise with the onset of the antidrug campaign in 2016, they continued in 2017,"reads the report released Friday (Washington time). The report also expressed doubt and uncertainty over Filipino government reports on the killings. "Police claimed to have begun investigations of all reports of extrajudicial killings,"the report read in part. "Some civil society organizations accused police of planting evidence, tampering with crime scenes, unlawfully disposing of the bodies of drug suspects, and other actions to cover up extrajudicial killings,"it added.

International

Canadian Liberals Formally Endorse Drug Decriminalization, Trudeau Demurs. Canada's governing Liberal Party endorsed the decriminalization of the possession of all drugs at its national convention Saturday. But party policy isn't necessarily government policy, and party leader Prime Minister Justin Trudeau has distanced himself from the decriminalization plank. Drug decriminalization, as well as the decriminalization of sex work and proposals to reform health care, which the party also approved, are seen as bolstering the Liberals' odds against the New Democrats, who traditionally attack them from the left.

(This article was prepared by StoptheDrugWar.org's 501(c)(4) lobbying nonprofit, the Drug Reform Coordination Network, which also pays the cost of maintaining this web site. DRCNet Foundation takes no positions on candidates for public office, in compliance with section 501(c)(3) of the Internal Revenue Code, and does not pay for reporting that could be interpreted or misinterpreted as doing so.)