Effective June 29, New Mexico became the 17th state to legalize recreational cannabis for adult users. The new law allows possession of up to 2 ounces of cannabis or equivalent amounts of cannabis extract.
Personal production of no more than 6 mature plants per adult is also now permitted. The new law also allows for the production of recreational cannabis under strict licensing by the state Cannabis Control Division of the New Mexico Regulation and Licensing Department (RLD)
PRODUCTION LICENSING DEADLINES
On June 29, 2021, the licensing of medical cannabis manufacturing transferred from the New Mexico Department of Health over to the RLD.
The new state law mandates deadlines for producer licenses to be issued beginning no later than September 1, 2021.
No later than January 1, 2022 all other licenses, including testing, distributing, selling, server permits and consumption hosting are to be issued.
No later than January 1, 2022, the state must begin training and education programs.
No later than April 1, 2022 all adult-use purchasing is to be allowed.
PROPOSED RULES
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:
ccd.rld.state.nm.us
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.
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.
LICENSING FEES
On June 29, the first of several public-rule hearings by the New Mexico Licensing Department took place. The public hearing focused on the general licensing requirements for cannabis producers.
Robert Sachs, deputy director of policy for the RLD Cannabis Control Division (CCD), presented application requirements and proposed annual licensing fees for various types of licenses in the cannabis industry.
The proposed annual fee for a courier license is $250, and $100 for each additional license.
For testing laboratories, manufacturers, producers, retailers, and research laboratories, the proposed annual license fee is $2,500, and $1,000 for each additional license.
For a vertically integrated cannabis establishment that contains any number of roles within a single company, the proposed annual license fee is $7,500, and $1,000 for each additional license.
A cannabis producer microbusiness license fee is $500 a year for 100 plants or less, and $1,000 for 101-200 plants. An integrated cannabis microbusiness could see an annual license fee of $1,000-$2,500, depending on specific business activities.
A cannabis consumption area license fee is $2,500 per year.
The link to quoted source material is here:
REVISED PROPOSED PRODUCER LICENSING RULES
On Thursday, July 8, revised proposed producer licensing rules were unveiled containing significant changes to the original rules. Two major changes were revealed:
1. Significantly increasing the number of weed plants licensed cannabis producers can grow from a maximum of 4,500 mature plants to a maximum of 8,000 such plants.
2. Large scale producers would face the same per plant fees as smaller producers. The previous proposed rules had higher fees for bigger producers.
Under New Mexico’s medical cannabis program, the current limit for licensed producers set at 1,750.
Purlife Medical Cannabis has eight medical cannabis dispensaries around New Mexico and it intends to expand into the recreational cannabis industry. Indy White, the director of sales for PurLife, described the higher plant limits for recreational cannabis as more reasonable and had this to say:
“With that number of plants, there’s a lot more variety in how you can cultivate.”
White also said many cannabis producers focus on large plants that take longer to grow and are more vulnerable to pests.
The new rules also include a proposed requirement that producers seeking licenses include in their application a “social and economic equity plan” aimed at encouraging racial, gender and age diversity within the cannabis industry workforce.
MARKET STUDY ON CONSUMPTION
The proposed rule changes increasing the number of plants was based on a market study on the demand for cannabis in the states of Colorado, Washington and Vermont that have legalized recreational marijuana. The survey also included more than 1,000 New Mexico residents. Of those surveyed, more than 20% said they had used cannabis in the last month.
Relying on the market study and the survey, a Massachusetts-based Cannabis Public Policy Consulting report concluded that between 2,007 to 3,756 plants per producer for each harvest cycle will be required to meet New Mexico cannabis demand during the first year of legalization.
The link to quoted source material is here:
https://www.abqjournal.com/2407688/nm-agency-revises-proposed-pot-limits.html
PUBLIC HEARING SCHEDULED
A public hearing on the revised New Mexico cannabis rules is scheduled for August 6 at the New Mexico State Capitol, Room 307, beginning at 9 a.m. The meeting is open to the public who can attend in person or by remote link ccd.rld.state.nm.us
LEGISLATION TO DECRIMINALIZE CANNABIS ON FEDERAL LEVEL INTRODUCED IN US SENATE
The Washington Post reported that on July 14 Senate Majority Leader Charles E. Schumer (D-N.Y.) introduced legislation to decriminalize marijuana at the federal level. The draft bill is co-sponsored by Sens. Cory Booker (D-N.J.) and Ron Wyden (D-Oregon and would remove federal penalties associated with cannabis, expunge nonviolent federal cannabis-related criminal records and begin regulating and taxing the drug. Schumer had this to say:
“This is monumental, because, at long last, we are taking steps in the Senate to right the wrongs of the failed war on drugs. … For decades, young men and young women, disproportionately young Black and Hispanic men and women, have been arrested and jailed for carrying even a small amount of marijuana in their pocket, a charge that often came with exorbitant penalties and a serious criminal record because of the overcriminalization of marijuana, and it followed them for the remainder of their lives.”
Democrat Senator Cory Booker of New Jersey spoke about the importance of expunging records because of the effects they have on the lives of those who have been convicted of violating marijuana drug laws and had this to say:
“And the hypocrisy of this is that, right here in the Capitol now, people running for Congress, people running for Senate, people running for president of the United States readily admit that they’ve used marijuana. … But we have children in this country, people all over this nation — our veterans, Black and Brown people, low-income people — now bearing the stain of having a criminal conviction for doing things that half of the last four presidents admitted to doing.”
STRONG PUBLIC SUPPORT YET REPUBLICANS OBSTRUCT
According to a recent Pew Research Center poll, public support for legalizing marijuana is high, with 91% of Americans saying marijuana should be legal in some for. Conservative Supreme Court Justice Clarence Thomas wrote in a June that federal laws against marijuana use or cultivation may no longer make sense and said:
“A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government’s piecemeal approach. ”
Notwithstanding people’s changing opinions about the drug support for legalization has yet to translate into support in Congress. A similar bill to decriminalize marijuana passed the Democratic-controlled House last December with bipartisan support, but not a single Republican Senator has expressed backing the Schumer Senate bill in the Senate.
Schumer acknowledged that no Republican Senator at this point supports the legislation that he does not have the votes but hoped that the draft legislation would attract proponents.
The link to the full Washington Post article containing source quotes is here:
https://www.washingtonpost.com/powerpost/congress-marijuana-schumer-federal-law/2021/07/14/8afbddaa-e4ab-11eb-a41e-c8442c213fa8_story.html
COMMENTARY AND ANALYSIS
The limitation on the number of plants that can be grown by licensed growers has always been a major source of contention. The limit for medical cannabis licensed producers at 1,750 has always been considered an arbitrary number not based on any market analysis. Increasing the number of plants licensed cannabis producers can grow from a maximum of 4,500 mature plants to a maximum of 8,000 such plants will in all likely be more than sufficient to deal with recreational demand and will not affect the medical cannabis producers.
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.
Both the city and the recreational cannabis industry are at a crossroads. They need to work together with licensing and 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.
A few regulation 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.
Both the city and the industry need to think broadly about the future of New Mexico’s marijuana industry in order to succeed.
The link to a related blog article is here: