On March 31, in a special session of the New Mexico legislature, the state became the 18 state to legalize recreational cannabis . New Mexico already has a medical cannabis program that has more than 107,000 enrolled patients. The new law takes effect July 1 and sales are to begin no later than April 1, 2022. However, if new regulations are in fact adopted before then, sales can commence moths before the April 1 deadline and that’s no April Fools.
The law legalizes possession of up to 2 ounces of cannabis, or an equivalent amount of cannabis extract. A companion bill enacted will expunge the public records of thousands of New Mexicans convicted of cannabis related possession charges.
Advocates of recreational legalization argue it will generate at least 13,000 jobs and millions of dollars for the economy. According to some reports, legalizing recreational marijuana will generate up to $800 million a year, a $200 million increase from the last years estimate of $600 million.
Duke Rodriguez, president and CEO of Ultra Health, New Mexico’s largest medical marijuana company told lawmakers during legislative committee hearings:
“It’s going to change New Mexico and ways we can’t imagine. … I think we will be a powerhouse, not only within the state, but we have the potential of being a powerhouse not only in this country, but you’d be surprised, we have the ability to also compete internationally.”
FIRST PROPOSED REGULATIONS
On Tuesday, May 26, it was reported that the first proposed rules dealing primarily with marijuana producer license and plant fees were released. The link to the regulations is here:
The first proposed rules deal with marijuana producer license and plant fees. The drafted rules if adopted will set the cost of both producer and retailer licenses at $2,500 annually. Licenses for cannabis consumption areas, or designated places where adults can smoke, eat or drink cannabis products, would cost $2,500 annually under the draft rule.
The proposed rules call for a 3-tier system for cannabis producer plant limits with a maximum of 4,500 mature plants. Larger-scale producers would be charged higher per-plant fees than smaller producers.
Plant count limits have been the source of controversy with the States “medical marijuana” program with the current limit for licensed medical producers set at 1,750 plants. The 1,750 limit somewhat arbitrary as an attempt to avoid flooding the market with product.
The regulations must be adopted in order to meet the specific deadlines for implementing the law. Those deadlines are as follows:
No later than Sept. 1 – Start accepting and processing license applications from producers.
No later than Jan. 1, 2022 – Start issuing licenses and server permits; begin training and education programs.
No later than April 1, 2022 – Begin retail sales of recreational cannabis.
Regulation and Licensing Superintendent Linda Trujillo said the rules were crafted with input from other state agencies and existing medical cannabis producers. Trujillo had this to say in a released statement:
“… Today’s proposed rules don’t mean the conversation is over. … Through public comment, public hearings and ongoing conversations, we will continue to strengthen these rules to ensure the best possible outcomes. … Our goal would be to take it live with commercial sales before April 1, 2022.”
Depending on the pace of adopting new rules for recreational cannabis industry and court challenges that may slow down the process, recreational cannabis sales could start before an April 2022 deadline in the law enacted.
According to Regulation and Licensing Superintendent Linda Trujillo, the agency is moving quickly to hire top-level staffers for the department’s newly created Cannabis Control Division. Upwards of a dozen positions will be shifted over from the Department of Health once the new law takes effect, Trujillo said.
CONCERNS RAISED OVER REGULATIONS
Duke Rodriguez, CEO and president of Ultra Health Inc. the state’s largest medical cannabis producer, and former NM Health Department cabinet Secretary, expressed concern over the proposed limits and questioned what evidence was used to set the limits on plant growth output. Rodriguez had this to say in a report by the Albuquerque Journal:
“The model being proposed seems to advocate smallness in aspiration and doesn’t reflect the robustness that will be needed to achieve the 11,000-plus jobs and several hundred million-dollar cannabis industry.”
The link to the quoted source material is here:
https://www.abqjournal.com/2394218/recreational-pot-sales-could-fire-up-before-april-deadline.html
RECREATIONAL CANNIBUS LEGISLATION ALLOWS FOR ZONING RESTRICTIONS
Major highlights of the enacted legislation is that local jurisdictions, city and counties, cannot opt out of commercial sales, but can establish restrictions on operating hours and locations.
The legislation gives local governments, city and county governments, some authority to determine where cannabis dispensaries can be located.
The state’s counties will not have the authority to be able to prohibit cannabis sales nor prohibit the licensing of stores. In other words, local zoning rules would have been able to be used to control the number of stores in an area where they the stores could be located. This is identical to zoning restrictions placed on retail stores that sell pornography.
Cannabis establishments can also offer on-site consumption in certain circumstances.
The bill allows people 21 years or older to buy, possess and use marijuana outside the home up to 2 ounces of marijuana. People will be able to buy no more than 2 ounces of cannabis or 800 milligrams of edible cannabis. There are also limits on extracts. It is estimated that sales will generate more than $300 million in revenue for the state.
The state will regulate all sellers and there will be no limits on the number of licenses issued. This is a dramatic departure from the limited number of licenses available in liquor licenses which have a cap based upon population. There will be a cap on the number of plants sellers can grow. Households would be permitted to grow up to 12 mature plants for personal use.
The state would levy a 12% excise tax on sales to start, and the tax would grow to 18% over time. Gross receipts taxes would also be added on, pushing the total tax rate to 20%. There will be a maximum 20% tax on it.
ABQ ZONING RESTRICTIONS PROPOSED
Mayor Tim Keller originally requested the City Council enact an amendment to the Integrated Development Ordinance that would limit any marijuana dispensary to operate within 300 feet from any school, daycare, church or residential neighborhood. It is essentially identical to restrictions place on bars and adult entertainment establishments. The proposed ordinance also said they can’t open within 660 feet from any main street. As was orginaly written, the proposed zoning restrictions would have barred cannabis businesses from “main street” areas, which would include Downtown Central, the Nob Hill Central Area, Lomas, Menaul, Candelaria, Juan Tabo, Constitution just to mention a few, and within 300 feet of areas zoned for residential or mixed use.
Republican City Councilor Trudy Jones, who Keller asked to sponsor the legislation, said she wants to make sure that cannabis is being sold in the right areas. Jones put it this way:
“We just want to get ahead of it and make sure that we can make this legal but also safe for the people in the community as possible. … [We want to] just to make it fit in certain areas where it fits and where it would be most used and appreciated.”
Mayor Keller for his part said in a statement that his office is working with Councilor Jones “to begin a conversation on the implementation [of the state’s new recreational cannabis law].
“With only one chance each year to adjust the [Integrated Development Ordinance], we’re glad that Councilor Jones is addressing key issues for neighborhoods across our city. ”
KELLER ADMINISTRATION MODIFIES ORGINAL PROPOSAL AFTER INDUSTRY CONDEMNATION
The proposed zoning is allowed by the state statute legalizing recreational marijuana, but there was swift condemnation by the industry of the Mayor’s proposed changes to the Integrated Development Ordinance (IDO). Advocates for the cannabis industry said the change to the IDO will apply the same restrictions to cannabis dispensaries that now apply to strip clubs and adult bookstores. The ordinance would also require dispensaries to put 21 and over on all of their signs and prohibit them from using the marijuana leaf on any signage.
The New Mexico Cannabis Chamber of Commerce, a cannabis industry trade group, wrote to Keller warning that his proposed zoning restrictions would have “unintended consequences” on business and the letter said:
“As written, the zoning amendments would preclude more than half of the current cannabis businesses – cultivators, manufacturers and retailers – in Albuquerque from participating in the adult use market.”
Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, also had this to say:
“I don’t understand any reason for the rules. … They don’t seem to increase safety. It just seems to increase the stigmatizes of cannabis. … Based on the [proposed zoning change] … it is pretty hard to find a place this far away of the school, this far away from a daycare. These zoning changes would force them to move all of the facilities and not just the dispensaries but grow operations, manufacturing facilities all of the parts that go into making cannabis products.”
The link to quoted source material is here:
On June 2, it was reported that the Keller Administration has modified the zoning proposal that would have heavily restricted where the legalized recreational marijuana market could operate in Albuquerque. It turns out that the first proposal was rushed because the city has only one opportunity per year to update its zoning code. The yearly updating of the comprehensive zoning code was already underway when state lawmakers in April voted to legalize recreational cannabis.
Keller’s initial proposal would have blocked new shops from opening in Nob Hill and areas of Downtown and limited opportunities in mixed-use zones. According to the Keller Administration, the original proposal was based largely on other communities around the U.S. that have already legalized recreational marijuana and the frameworks they have instituted.
On June 2 after objections by the industry were raised, the Keller Administration released an updated proposal. The new proposal from the Keller administration would:
Prohibit cannabis dispensaries on the five roads designated as “Main Streets,” which include much of Central Avenue and parts of Fourth, Broadway, San Pedro and Bridge, where considerable public money has been spent on revitalization.
Allows cannabis storefronts on side streets from the identified main streets reversing the original proposal barring them for 660 feet off the main streets.
Cannabis dispensary licensing application proposed within 300 feet of a residential mixed-use zone would be required to get “conditional use” approval through a public hearing.
Mandates 1,000 feet between cannabis retail businesses.
Time of operation for all retail sales dispensaries would be limited to 7 a.m. to 10 p.m.
Off-premise, roadway signs would be prohibiting. State law allows signs of any size on the actual buildings.
All of the 47 current medical cannabis dispensaries in Albuquerque will be grandfathered in even if they become a recreational cannabis retail site regardless of what zoning is put in place.
The link source material is here:
https://www.abqjournal.com/2396266/mayor-loosens-cannabis-shop-zoning-proposal.html
COMMENTARY AND ANALYSIS
Mayor Tim Keller and his administration were short cited when they attempted to restrict a new industry from opening within 660 feet from any main street. Likewise, the industry overreacted to the initial proposal. The industry needs to recognize the city has the exclusive authority to decide locations.
NIMBY
It’s likely the recreational cannabis industry will be subjected to the NIMBY syndrome. NIMBY stands for “Not In My Back Yard” relating to proposed projects, businesses and zoning changes opposed by home owners, property owners, and business owners. Four of the biggest issues that generate public outcry by neighborhoods are the adult entertainment industry including pornography stores, homeless shelters, methadone clinics, and even establishments that sell liquor such as convenience stores and gas stations.
The city over the years has dealt with and been forced to close down violent bars that became magnets for crime and violent crime. It is conceivable that a retail cannabis store will be a target for criminals. At this point in time, no one knows for sure what direct impact recreational marijuana retail stores will have on any business or residential area and schools.
Both the city and the recreational cannabis industry are at a crossroads. They need to work together with zoning restrictions that will in fact ensure that the new industry can coexist with neighborhoods without creating nuisance businesses that create magnets for crime and contribute to loitering, public impairment and panhandling. The modified zoning changes take the similar approach the city uses as to liquor licensing and the industry should not object to that approach.
A few zoning requirements that need to be included for all recreational cannabis businesses and the issuance of a license to do business in the city that will prevent them from becoming magnets for crime would include:
1. Security cameras and uniform security personnel.
2. Mandatory background checks and periodic drug testing of all employees as a condition of employment.
3. Storage of all product in secured areas reducing access after hours of operation, such as used by jewelry stores to prevent thefts.
4. Mandatory nuisance abatement agreements before the city issues a license to do business where the business owner agrees to take remedial measures in the event the business reaches a level of calls for service as a result of criminal activity.
There is little doubt that New Mexico has the real potential to be “a production juggernaut” and a magnet for tourists and cannabis users from Arizona and Texas, both states that have yet to legalize.
Both the city and the industry need to think broadly about the future of New Mexico’s marijuana industry. The decisions made now as to zoning restrictions before state regulations are even adopted will have unintended consequences if not careful.
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POSCRTIPT
KRQE NEWS SURVEY ON PEOPLE FEEL ABOUT MARIJUANA LEGALIZATION
On May 16, KRQE News 13 posted on its web page a survey taken to gauge how people feel about marijuana legalization and marijuana-related expungement. The report was written by KRQE News reporter Curtis Segarra.
The report was very extensive and one of the most detailed seen in some time. More than 600 people responded to the survey including people that have consumed cannabis and those who have not. The report contains numerous supporting colored bar graphs for review. The link to the report with all the graphs and data is here:
According to the report, a whopping 99.35% or respondents were aware of the new law while less than 1% or a mere 0.65% were not aware.
WRITTEN TEXT OF THE KRQE REPORT
Following is the full written text of the report:
“The survey asked users to rate the threat that marijuana, alcohol, prescription drugs, and methamphetamines pose to safety in New Mexico. Of the 607 people who answered the question, only about 17% thought marijuana posed an extreme threat. Nearly half of respondents, on the other hand, thought that alcohol posed an extreme threat, and roughly a quarter of people thought that prescription drugs were an extreme threat. Methamphetamines, unsurprisingly, were rated as an extreme threat by more than half of the survey-takers.
Of those who thought marijuana poses an extreme threat to safety, almost all indicated that they are extremely worried that legalized marijuana will lead to impaired driving. Of those who indicated that marijuana posed no threat to safety, the majority weren’t worried about impaired driving.
Between the two extremes, respondents could also indicate that they were somewhat or moderately worried. Of all the respondents, almost 30% were either somewhat or moderately worried that legalized marijuana would lead to impaired driving.
When it comes to safety, responses were split on whether or not survey-takers thought the legalization of cannabis will increase marijuana use among kids. A fifth of respondents indicated that they didn’t know if it would affect use among kids. Respondents seemed to have a better idea whether legalization would benefit the economy. Just over 70% of respondents said it would be an economic boost.”
CRIMINAL RECORD EXPUNGEMENT
The survey also asked about marijuana-related expungement. Almost 70% of those surveyed said they were in favor of removing marijuana-related charges and arrests from people’s records. Of those in support, over 80% think there should be no criminal punishment for using marijuana and about 66% think expungement helps people get jobs. Among those that do not support expungement, almost 70% think that once someone gets a criminal record, they shouldn’t be able to change it.
Republicans and Democrats were also split on whether or not employers need to be able to see marijuana records when hiring. About 56% of Republicans thought it would be important to see marijuana charges when making hiring decisions. Only about 17% of Democrats thought it would be important to be able to see marijuana-related priors when hiring new employees.
Finally, Republicans were overwhelmingly in favor of having people with criminal records pay for their own expungement — only 6.58% of Republicans thought taxpayers should foot the bill. Democrats were split on the issue. Roughly 41% of Democrats said it should fall to the taxpayers. Just under 25% said those getting their records expunged should pay. And just over a third of Democrats said the cost should be shared by both taxpayers and those with records.
Regardless of the survey results, the New Mexico legislature has already spoken and the state is starting to implement the new laws. For expungement, the review and dismissal of sentences will be at no cost to incarcerated folks, implying that taxpayers will have to carry the estimated $500,000 cost to implement the new law.