On March 7, 2019 the state House passed House Bill 356 (HB 356) with a two-vote majority of 36 to 34 that would have legalized the recreational use of marijuana. HB 356 bill included a provision for state run and regulated stores. House Bill 356 was a broad marijuana legalization proposal and dedicated some of the tax revenue from cannabis sales to research into cannabis impairment, purchasing roadside testing equipment for law enforcement and to train police officers as drug recognition experts when drivers are stopped.
HB 356 was legislation that was the result of bipartisan efforts and talks involving House Democrats and Senate Republicans. Every Republican Representative in the House voted against HB 356 joining 10 Democrats in opposition to it. The bipartisan proposal to allow cannabis sales at state-run shops narrowly cleared the state House but failed to make it through the Senate.
After the Legislature adjourned on March 21, 2019, Governor Michelle Lujan Grisham said that she would add the issue of legalizing recreational marijuana use to the 2020 legislative agenda which will be a 30-day session. To that end, on June 28, 2019, Governor Michelle Lujan Grisham announced the creation of a “Cannabis Legalization Working Group.” The task force consists of 19 members including the Democratic and Republican legislators who sponsored unsuccessful legislation this year to authorize and tax recreational marijuana sales at state run stores. The group also includes representative of a labor union, sheriff’s department, health care business, Native American tribes, medical cannabis businesses, a county government association, and commercial bank and hospital company.
The Working Group held a series of public hearings, listening to the public and compiling recommendations for the governor that will be incorporated into proposed legislation to be introduced in the 2020 legislative session. The Governor’s working group is now winding down its work and is beginning to make recommendations formal.
TRADITIONAL LICENSING SYSTEM PROPOSED
On September 10, 2019, the Governor’s task force endorsed and is recommending a traditional licensing system for private companies that would grow and sell marijuana. The state would not operate the stores. The licensing system is the same system as used for the State’s medical cannabis program. The proposal is a complete shift from the legislation that advanced through the state House last session where Democratic lawmakers embraced the idea of state-run cannabis shops as a part of a compromise with Republicans.
The task force also recommended against allowing local governments to ban marijuana sales entirely within their jurisdictions. Notwithstanding, the task force is recommending that Cities and counties be permitted to impose zoning restrictions and similar regulations for cannabis retail stores. Some states that have legalized recreational use of marijuana allow local communities to opt out of legalizing sales.
Remaining issues the task force intends to address include how to handle prohibitions on driving under the influence and roadside testing for marijuana intoxication and other changes to the state’s medical cannabis program.
FULL SERVICE LIQUOR LICENSES ARE TRADITIONAL LICENSING
Guest commentator John Strong explained the traditional licensing system New Mexico has for full-service alcohol licenses this way:
“Decades ago, the New Mexico legislature created a system of a set and limited number of licenses to be able to serve or sell liquor by the drink. This is not the same as wine and beer licenses. There are currently 1,411 licenses in the state for this purpose, and they trade as a commodity and can be bought and sold to the highest bidder. The state derives no economic benefit from the purchase, sale , or leasing of these licenses at all. They simply allow the owner to then go to the State Alcohol and Gaming Commission and apply for a license that allows them to sell alcohol.
Since there are a limited quantity of these licenses there has been a constant upward push in the price to acquire them. About 10 years ago these licenses cracked the $200,000 mark. Recently the last two licenses sold were reported by the state to be $500,000 and $590,000. Originally most if not all of these licenses were owned by local small businesses scattered across the state, but over the years the increased prices began to tempt small family owned businesses to simply sell them as they became worth much more than the actual business they were attached to.
Therein begins the problem. Many of these licenses began to migrate away from small locally owned businesses to large out of state corporations. Companies like Marriott and Hilton Hotels, Cheesecake Factory, Applebee’s, and other large chains. Then groups formed here to acquire licenses and lease them out rather sell them, both in anticipation of ever-increasing values for them as well as increasing lease payments.”
For full John Strong commentary see:
LEGALIZATION OF RECREATIONAL MARIJUANA FAR FROM CERTAIN
Even though Democrats hold majorities in both the New Mexico State Senate and the House of Representative the legalization of the recreational use of marijuana in the 2020 session is far from certain. There are still many members of the Senate and House that have staunchly opposed all previous efforts to legalize marijuana.
Although Governor Lujan Grisham supports the general concept of legalization of recreational marijuana, she has stressed repeatedly that any new law allowing recreational marijuana must not interfere with the state’s medical cannabis program, it must address driving while under the influence and it must protect workplace safety.
COMMENTARY AND ANALYSIS
When it comes to the legalization of the recreational use of marijuana, the legislature needs to avoid a traditional licensing system like it created for full-service alcohol licenses. With present alcohol full-service licenses, the number of licenses are capped and based on population numbers. Liquor licenses are now being sold for upwards of $1 million where only the wealthy or major restaurant chains can only afford them.
The result and unintended consequence will be identical with recreational marijuana licenses purchased for a few thousand dollars from the state and held onto for a windfall profit.
The exact same thing will happen with recreational marijuana licenses unless the licenses are not tied to population. There should be no limit on the number of recreational pot licenses that will create a market of licenses that increase value and are considered an investment by the private sector as opposed to regulation by the state to protect the public health safety and welfare.
One option that should be considered is placing the issue on the ballot for voters to decide, which has been done in other states like Arizona and Colorado. However, if a strong consensus can be achieved and if a recreational legalization program can be supported by large majorities in both the House and Senate, they should proceed and vote to legalize the recreational use of marijuana.
Legalize, regulate, tax recreational marijuana like alcohol and cigarettes.
For a related blog article see: