What's being voted on
Among the many critical issues being voted on today in North Dakota, none stands out as more intriguing than North Dakota Measure 5, which is officially known as the North Dakota Compassionate Use Act.
Measure 5 will decided whether or not the people of North Dakota want to allow medical marijuana to be legalized for certain ailments, including cancer, HIV/AIDS, epilepsy, glaucoma, and post-traumatic stress disorders, to name a few. If approved, the North Dakota Department of Health would be responsible for providing identification cards for eligible patients and would also be tasked with governing and regulating the state's cannabis industry.
In a rather odd twist, because North Dakota's population is considerably smaller than other states that have legalized recreational or medical marijuana, the costs for implementing and governing medical cannabis would actually outweigh the revenue generated from the sales tax on medical pot. Based on an analysis run through June 30, 2019, expenditures are expected to total $9.8 million, whereas associated revenue is expected to total just $6 million.
What the polling suggests
The big question, of course, is whether medical marijuana would pass in North Dakota. The answer might be one of the biggest mysteries of this election cycle because it's been quite a while since any firm conducted a cannabis poll within the state.
Sadly, the most recent poll comes from Oct. 2014 from Forum Communications Co. and the University of North Dakota College of Business and Public Administration. Though 47% of the survey takers approved the idea of legalizing medical cannabis compared to 41% who did not, those who "strongly opposed" the idea outnumbered those who "strongly support" medical marijuana by a slim margin. Since it's been two years, it's tough to tell where the public's opinion may lie.
However, a 2015 national poll from CBS News found that more than six in seven people across the country want to see medical pot legalized, which may bode well for Measure 5.
What's at stake
On one hand, North Dakota is a complete afterthought among the states voting on marijuana today because of its relatively small population and the projected $6 million in revenue generated over the next two-and-a-half years. By comparison, most eyes are on California, which could legalize recreational marijuana and generate $1 billion in added annual tax revenue.
Nonetheless, an approval in North Dakota would further encourage Congress to consider its federal stance on cannabis, at least from a medical perspective. With North Dakota and three other states voting on medical cannabis today, we could wake up tomorrow with more than half of all states having legalized pot for medical purposes.
Despite what looks to be an intriguing day for the pot industry, I'd encourage investors not to get too carried away by any of the outcomes. Even if marijuana were to sweep in all nine states, the industry would still be facing an uphill battle, especially with the Drug Enforcement Agency only recently denying two petitions to reschedule marijuana.
Lawmakers continue to insist that time and example are the best ways to determine if there's a path forward for federal legalization. In the meantime, losses are likely for most publicly traded marijuana companies. It's simply not a suitable or safe area to invest in right now.