Today the states of Michigan and North Dakota will vote on whether or not to legalize recreational marijuana. And not only would they legalize cannabis, they would also institute some of the lowest taxes in the entire country.
Michigan and North Dakota's ballot initiatives would institute the lowest taxes on legal recreational marijuana in the entire country. Michigan's initiative would institute a six percent sales tax and a 10 percent excise tax on cannabis, while North Dakota's initiative would institute only a five percent tax on marijuana products. Even if local governments institute their own taxes, Michigan and North Dakota would be far, far below other legal states such as Washington or California where cannabis consumers pay over 40 percent in taxes on marijuana.
This isn't actually too surprising. Many have noted that since the first few states legalized recreational marijuana, subsequent legalized states have imposed lower taxes after seeing the complaints from earlier efforts. But North Dakota and Michigan are still pretty surprising.
Some have wondered if these low taxes could actually hurt the chances these initiatives succeed, particularly in North Dakota. Some believe the North Dakota initiative is too vague and doesn't lay out a clear enough regulatory framework, and that the costs for the government may be greater than North Dakotans want. And low cannabis taxes also make it hard to argue that legalizing marijuana will help raise revenues for state governments, particularly since marijuana taxes make up such as small percentage of state revenues even in places with high taxes.
But if both of these states do pass their initiatives, they will easily become the most attractive places to buy marijuana in the country.