What Survived North Dakota’s September Special Session

September 5, 2026

North Dakota lawmakers wrapped up their three-day special session Friday after considering kratom regulation, property taxes, data-center and industrial-development confidentiality, and financing for the stalled North Dakota Military Gallery.

For business owners, the final results look considerably different from the bills that entered the session.

Here’s what passed, what failed and what businesses should know now.

HB 1628 — PASSED AND SIGNED

Natural kratom will be legal under regulation; synthetic derivatives are banned

This became the Legislature’s compromise after the House rejected a separate proposal for a complete kratom ban.

The final HB 1628 allows qualifying pure-leaf kratom while placing specified synthetic and concentrated derivatives—including 7-hydroxymitragynine above the bill’s threshold—into Schedule I.

The House gave final approval to the Senate-amended HB 1628 91-2 Friday morning, and Gov. Kelly Armstrong signed it later that day. Armstrong also rescinded the August executive order that had temporarily banned all kratom.

What businesses need to know

Natural kratom is not immediately returning to store shelves.

The Attorney General must first write the administrative rules necessary to implement the licensing system. The Governor’s Office says all kratom sales remain prohibited until those rules are in place.

Once the system is operating:

• Sales are restricted to people 21 and older.
• A separate license is required for each processor or retail location.
• The initial license costs $10,000 per location.
• The final legislation sets annual renewal at $5,000 per location.
• Kratom extracts are prohibited.
• Products must contain no more than 0.05% 7-OH under the bill’s pure-leaf definition.
• Products must undergo testing by an approved accredited laboratory.
• Labels must identify ingredients, serving information, mitragynine and 7-OH content and required warnings.
• Products must be locked behind the sales counter.
• Products designed or marketed to appeal to children are prohibited.

That $5,000 renewal fee is an important change from the introduced version of HB 1628, which we previously reported as $500.

Penalties are substantial

Operating without a license is a Class B misdemeanor.

A licensed business violating the regulatory chapter faces:

First violation: $10,000 fine + three-day suspension
Second violation: $15,000 fine + 30-day suspension
Third violation: $25,000 fine + permanent license revocation

Selling a product that violates the controlled-substance provisions can also result in criminal prosecution and automatic permanent revocation.

Who it affects

Smoke shops, convenience stores, specialty retailers, processors, wholesalers and distributors considering whether kratom sales make business sense under the new system.

Why it matters

North Dakota did not ultimately choose between complete prohibition and the original regulatory bill.

Lawmakers combined elements of both approaches.

Natural pure-leaf kratom can eventually return under strict regulation, while specified synthetic and concentrated derivatives are prohibited.

For a small retailer, the financial question also changed considerably during the session. A single location now faces $10,000 to enter the market and $5,000 every year to remain licensed, before product testing and other compliance expenses.

A five-location retailer would therefore face $50,000 in initial licensing costs and $25,000 annually thereafter.

Important: Businesses should not place kratom back on shelves yet. The current prohibition remains in effect until the Attorney General’s rules are implemented.

Official sources:

Final HB 1628 legislation and bill history

Governor Armstrong — HB 1628 signed and executive order rescinded

SB 2408 — FAILED

The Legislature rejected a permanent ban on all kratom

SB 2408 started the session as legislation aimed primarily at specified synthetic and highly concentrated kratom derivatives.

It changed substantially.

By Thursday, the Senate had amended it into a full prohibition of natural and synthetic kratom and passed it 46-1.

Friday morning, the House rejected that approach.

The vote was extraordinarily close:

46 yes — 47 no — 1 not voting.

The bill needed 48 votes and therefore failed.

Why it matters

This vote determined the basic direction North Dakota ultimately took.

Instead of permanently prohibiting all kratom, lawmakers settled on HB 1628’s combination of:

regulated natural kratom + prohibited synthetic derivatives.

For affected retailers, SB 2408 itself creates no new requirement because it failed.

SB 2405 — FAILED

No change to the property-tax calculation

SB 2405 would have changed the order in which North Dakota’s 5% early-payment property-tax discount and primary residence credit are calculated.

The Senate passed it Thursday 27-20.

The House response Friday was considerably different:

0 yes — 93 no.

The bill failed.

Who it affects

Homeowners, including business owners and self-employed North Dakotans who own their primary residences.

Why it matters

The practical answer is simple:

Nothing changes because of SB 2405.

The proposed special-session change to the order in which the early-payment discount and primary-residence credit are applied will not take effect.

SB 2406 — FAILED

Proposed NDA restrictions on data centers and industrial projects did not survive

SB 2406 would have prohibited state agencies and political subdivisions from entering certain nondisclosure agreements with developers involving data centers and other industrial projects.

This was one of the bills NDBU watched particularly closely because the definition of an industrial project extended beyond data centers and potentially reached manufacturers, utilities, energy projects, infrastructure and other major developments.

The Senate rejected the bill Thursday:

15 yes — 32 no.

Who it affects

Data-center developers, manufacturers, utilities, energy companies, economic-development organizations, large developers and local governments negotiating prospective projects.

Why it matters

Again, the immediate business answer is straightforward:

The proposed NDA restrictions did not become law.

Businesses and government entities do not have a new confidentiality requirement arising from SB 2406.

The underlying issue is unlikely to disappear, however. Debate during the session indicated lawmakers may revisit confidentiality and major development projects during interim work or the 2027 regular session.

For now, this is a watch item—not a compliance requirement.

Official bill status:

North Dakota Legislature — SB 2406

SB 2407 — PASSED

Legislature provides another financing path for the stalled Military Gallery

The special session also dealt with the unfinished $78 million North Dakota Military Gallery on the Capitol grounds.

Construction stopped July 3 after private fundraising fell well short of projections and funding problems left contractors waiting for payment.

The Legislature approved SB 2407.

The Senate passed it 39-8 Thursday, and the House followed Friday 71-22.

What it does

The legislation:

• removes the fundraising condition that had prevented access to $15 million already appropriated by the state;
• authorizes a new $20 million Bank of North Dakota line of credit intended to keep construction moving;
• expects private donations to repay that new credit line by March 31, 2029; and
• shifts project oversight to the Capitol Grounds Planning Commission.

The project had approximately $5.3 million in unpaid bills through September 15, including $4.7 million owed to contractors, according to testimony during the session. One North Dakota contractor testified that his company alone was owed nearly $1.9 million.

Who it affects

Contractors, subcontractors, suppliers and workers involved with the project; Bank of North Dakota; private donors; and ultimately North Dakota taxpayers if private fundraising does not repay the additional credit.

Why it matters

For businesses working on the project, the legislation is intended to get money moving and construction restarted rather than leaving contractors carrying unpaid work.

The larger issue isn’t finished.

The new $20 million credit line is expected to be repaid through private fundraising. If that doesn’t happen by March 2029, a future Legislature will have to decide whether to extend the deadline or find another funding source.

Lawmakers are already discussing whether North Dakota needs stronger safeguards for future public-private projects so state agencies cannot commit to construction without secured funding.

That could become a broader 2027 procurement and public-project issue worth watching.

Source:

North Dakota Monitor — Military Gallery financing approved

The Business Bottom Line

The special session produced one immediate new business regulatory framework, one major public-project financing decision and several proposals that went nowhere.

For most North Dakota businesses, there is nothing new to comply with Monday morning.

For businesses involved with kratom, however, HB 1628 creates an entirely new licensing and compliance structure—and the final version is more expensive than the legislation originally introduced.

For developers and economic-development organizations, the proposed NDA restrictions failed.

For homeowners, the proposed property-tax calculation change failed.

And for contractors tied to the Military Gallery, the Legislature authorized a financing structure intended to restart the stalled project and address unpaid construction obligations.

Perhaps the larger lesson from this three-day session is why following legislation through the final vote matters.

SB 2408 began as one kind of bill and became something substantially different before failing by a single vote.

HB 1628 changed enough during the process that its final licensing costs differ materially from the version businesses first saw.

A bill number tells you what was introduced.

The final language tells you what businesses actually have to live with.

NDBU will continue watching implementation of HB 1628, including the Attorney General’s rulemaking and the point at which licensed natural-kratom sales may legally resume.

Plain-language business intelligence. What changed • Who it affects • Why it matters.