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LRC Downgrades Recreational Marijuana Initiative Jail Savings, Says Measure Leaves Pot Illegal

Melissa Mentele of New Approach South Dakota reports a disappointing (for her and her supporters) change in the prison/jail fiscal statement for her organization’s recreational cannabis initiative. In a Facebook video, Mentele says that, several days ago, the Legislative Research Council told her that the analysis they had done so far had found $42.5 million in savings in incarceration costs over ten years.

$4.25 million in annual savings just in incarceration—that doesn’t include the tax revenues from marijuana sales, the license fees for opening cannabis establishments, or the broader economic impact that would drive sales tax revenues up in other sectors. Senate Bill 77, which comes into effect today, now requires such a broader fiscal analysis for any initiative, but since Mentele’s petitions underwent the LRC review process and hit the streets before the enactment of SB 77, her initiatives are not subject to that new requirement. However, if LRC were to look at Colorado’s 2016 revenue from taxes, licenses, and fees and divide by our states’ population ratio, they could estimate that South Dakota could rake in $19.6 million from Mentele’s recreational cannabis initiative.

Save $4.25 million on jail costs, add $19.6 million in revenue—this one initiative could boost the state’s annual budget by $23.9 million. Those figures would certainly help New Approach sell its measure to the voters.

But New Approach won’t get those numbers. In a video posted to Facebook yesterday, Mentele says LRC changed its mind about the jail cost estimate. In the analysis released yesterday, LRC says that the recreational cannabis initiative will only save the state $2 million over ten years, or $207,000 annually, in jail costs.

Mentele explains the switcheroo:

LRC calculates the reduced jail savings solely from Section 8 of the initiative, which decriminalizes possession of marijuana paraphernalia. To make the other 95% of the originally reported savings disappear, LRC points to Section 2 of the initiative:

Section 2. Notwithstanding any other law, the following acts are not unlawful under law of any subdivision or be a basis for seizure or forfeiture of assets under South Dakota law

  1. Possessing, consuming, growing, using, processing, purchasing, or transporting an amount of cannabis that does not exceed the possession limit;
  2. Transferring one ounce or less of cannabis and up to six immature cannabis plants to a person who is twenty one years of age or older without remuneration;
  3. Controlling property where actions described by this Act occur; and
  4. Assisting any other person who is twenty one years of age or older in any of the acts described in this Act [Recreational cannabis initiative, Section 2, received by Secretary of State 2017.03.27].

LRC reads that opening line about subdivisions and sees a crucial omission of state law:

The remaining marijuana decriminalization provisions of this measure are found in Section 2. The language only decriminalizes marijuana under the laws of “any subdivision” (cities, counties, etc.). However, marijuana convictions in South Dakota are charged under state law, As a result, these provisions have no practical effect. Had Section 2 been written to apply to state law, as Section 8 was for marijuana paraphernalia, additional prison and jail cost reductions would have accrued [Legislative Research Council, Prison/Jail Population Cost Estimate Statement on recreational cannabis initiative, 2017.06.30, p. 3].

That’s not just jail savings disappearing; that’s the “practical effect” of most of the initiative. LRC is saying that this initiative will let you have your bong, but Marty Jackley (or his successor) and DCI will still be able to bust you for growing, selling, buying, holding, or using anything you might put in that bong.


  1. grudznick 2017-07-01 08:49

    Mr. H, you might have a decimal (.) point in the wrong place. In American Math, decimal points are important.

    The partisan LRC did not take into account all the costs of the people who move from the demon weed to heroin or the other drugs on the hard side of the gateway.

  2. Neal 2017-07-01 09:43

    They might as well pull the plug on this version of the initiative if that’s the case.

  3. Donald Pay 2017-07-01 09:44

    Fiscal notes have always been closer to BS than fact. Once in a while they come close, but most of the time they are making such wild suppositions (as in the above case) that there is no basis in reality. Have they ever done a study to find out how far off fiscal notes are? It seems to me they need to state some sort of range of error, rather than sit there like Kremlin bureaucrats and state what everyone knows is made-up alternative facts. If they have no basis on which to judge their range of error, then they need to admit they don’t know.

  4. Porter Lansing 2017-07-01 10:43

    Legalization, transportation of your purchase and the right to grow a little bit for yourself should be legal statewide but every community should have the right to have their city council reject legal recreational or medical cannabis stores. Without this provision something that many have an aversion to would be forced on their community. Forcing something on citizens is just a little too German, even for SoDak. The little town I live in (41,000) has no recreational stores nor does over half the state of CO. Once legal, the business will center in places where it has the least impact on those reluctant. Patients who need pot medically and soft drug (liquor, tobacco & marijuana) customers will drive. If a town council acts against the will of their voters, we all know what will happen next election.
    * A big problem in California is that pot sales are set up like beer sales. Their pot stores buy from distributors (about a dozen licenses were granted and promptly bought up for mega-millions by large corporations) where in Colorado every store has to grow their own product. This stops giant Weed-Mart stores from monopolizing the market and removing the boutique reputation seen in famous USA wine and whiskey regions. Think Napa wines, South Dakota moonshine and Kentucky bourbon.

  5. John 2017-07-01 10:48

    Over a generation of history in Portugal, and long terms in other places, show declines in all drug use and drug-related crime with the decriminalization of small amounts of drugs. Facts are stubborn things.

  6. Chuck-Z 2017-07-01 11:52

    I kinda lost faith in the LRC a few years back when our Republicans decided it was too non-partisan for their taste and did some customizing of the office by ejecting Mr. Jim Fry. Of course they still call it non-partisan, but we know better don’t we?

  7. Cory Allen Heidelberger Post author | 2017-07-01 12:16

    Hey, I’m going to stick by LRC numbers just like I stick by CBO numbers. You may not like what they say, bet they are the only game in town. If you have better numbers from other sources, feel free to share and refute.

  8. Cory Allen Heidelberger Post author | 2017-07-01 12:17

    Grudz, I checked my decimals. I know I bounced between ten-year and annual figures, but I think I have them in the right places. Is there a specific number you think I misdecimated?

  9. Porter Lansing 2017-07-01 12:25

    mis-dec-i-mate – to mistakenly kill one in every ten of (a group of soldiers of others) as a punishment for the whole group. 😉 great word!!

  10. Donald Pay 2017-07-01 16:56

    I don’t intend to disrespect the LRC, but the problem comes when they select one of any number of assumptions about a piece of legislation. Those assumptions probably get lobbied heavily behind the scenes and the public has no alternative when they choose faulty assumptions. The LRC process lacks of any peer review or public input into what assumptions they use and what economic models or calculations get used. They come out with what is deemed gospel, but it is a guess based on whatever assumptions they select. They need to consider a range of assumptions about a piece of legislation, explain them and the impact that has on the fiscal situation.

  11. grudznick 2017-07-01 20:44

    The Council of the Legislatures takes its marching orders from the majority leaders in the legislatures like Messrs. Mickelson and Curd. When those two disagree then the big oxen rumble in secret parties in Sioux Falls and the winner calls back to Pierre and instructs the “nonpartisans” on what to say.

  12. Cory Allen Heidelberger Post author | 2017-07-03 12:45

    Barry, I suspect we’ll only get that estimate if someone proposes an initiative that would lead directly to such jailhouse organization.

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