Senate Bill 115 (SB 115) that would legalize recreational marijuana in New Mexico passed the Senate Public Affairs Committee along party lines with all Democrats voting yes and all Republicans voting no. The Senate Bill is sponsored by State Senator Gerald Ortiz y Pino and Representative Javier Martínez, both Albuquerque Democrats. Governor Michelle Lujan Grisham has endorsed the legislation and added it to the 30-day session agenda.
On January 29, the Cannabis Regulation Act won a narrow victory in state Senate’s Public Affairs Committee making it through the committee on a 4-3 vote that was strictly along party lines, with the Democratic members voting “do pass” and the republicans voting “do not pass”.
The bill still has a long way to go and it will have to be passed by two more state Senate committees, the Judiciary Committee and the Finance Committee, before the full legislative body takes it up for a vote. Although the New Mexico Senate is overwhelmingly Democratic with 26 members out of a total of 42, several prominent senators from that party have indicated that they are resistant to legalizing marijuana for recreational use.
Last year, it was the House that started the process of enacting legalization of recreational cannabis with a bill that narrowly passed the state House but stalled in the Senate in the final days. That proposal called for state-run cannabis stores. Senate Bill 115 does not. The approach this year is to have the Senate start the process in that it is the more conservative Senate that rejected last year’s efforts by the house.
In interviews, the Governor has acknowledged that winning approval of the marijuana legalization plan will be difficult. She believes the Senate will be the biggest hurdle and she had this to say:
“I think cannabis [recreational legalization] is going to be really hard [and] it should be. That is not something to run into without being really clear. … If I have it on the call, I’m serious about getting it passed”
WHAT SENATE BILL 115 WILL DO
Senate Bill 115 is 173-pages long and THE legislation will legalize use and sale of recreational marijuana for anyone age 21 and older. The 2019 New Mexico Legislature decriminalized possession which is now a $50 civil fine with no jail time. The proposed legislation provides for taxes on recreational pot at roughly 17% to 19% and makes medical marijuana tax-free and entirely subsides medical marijuana for low income patients.
The legislation will regulate both commercial and medical marijuana programs. The legislation avoids a traditional licensing system as is created for full-service alcohol licenses. As written, the recreational cannabis legislation contains no limit on the number of recreational cannabis licenses. Under the proposed legislation, the holder of a recreational cannabis license issued will have no vested property right in the license and the license is deemed property of the state. A license issued pursuant to the Cannabis Regulation Act will not be transferable from person to person, corporation to corporation or corporation to person. The licenses shall not be leased and shall not be considered property subject to execution, attachment, a security transaction, liens, receivership or all other incidents of tangible personal property under the laws of this state.
A Cannabis Control Division of the Regulation and Licensing Division will be created and will have very broad and extensive authority to regulate the industry. The division will have powers to promulgate rules and regulations, including many mandates and limitations on license issuance and quality control. The Cannabis Control Division must be up and running by January 1, 2021, which is a very ambitious deadline given the magnitude of creating the industry.
Medical cannabis providers could sell to recreational users beginning January 1, 2021 if the Department of Health determines it won’t harm the supply for people in the medical program. Broader commercial sales would start a year later, in 2022. The plan calls for food-grade testing of marijuana products. The legislation if passed will require all cannabis products sold in New Mexico to be tested and free from contaminants. Packaging must be clearly labeled with the THC dosage. The legislation also includes restrictions on advertisements that target youth. The legislation requires investments in training that would assist law enforcement officers in identifying impaired driving and not just limited to only cannabis-induced impairment.
The legislation does give local governments some authority to determine where cannabis dispensaries can be located. However, the state’s counties will not be given any authority to be able to prohibit cannabis sales nor prohibit the licensing of stores. In other words, local zoning rules will be able to be used to control the number of stores in an area where they the stores can located. This is identical to zoning restrictions placed on retail stores that sell pornography.
The legalization bill calls for generally a 19% tax rate. Each county and city have varying gross receipts tax rates and the cannabis tax would be added to those sales taxes. The tax is much lower than in other states and it is hoped it will prevent buyers from turning to the black market. The legislation will exempt residents in the medical cannabis program from the tax and would require cannabis growers to serve the medical market before the recreational market.
PROS AND CONS ARGUED
Supporters of the bill said legalization will help address uneven law enforcement. According to Senator Jacob Candelaria, D-Albuquerque, who presented the legislation to the committee:
“The criminalization of cannabis disproportionately harms young people and people of color”.
Candelaria, an attorney, also argued the lack of an accepted cannabis breath test such as that to what’s available for alcohol is not a barrier to law enforcement. Police officers already are trained to detect impairment, and drivers can be convicted, for example, without a specific breath alcohol test.
Opponents argued it is not said the right time for the bill. They said one major problem is the lack of technology available to quickly determine intoxication levels similar to a breath test for alcohol. Opponents also argue it would erode employers’ right to maintain a drug-free workplace, make it more difficult to keep impaired drivers off the road and increase crime.
AREAS OF CONCERN AND UNANSWERED QUESTIONS
In a February 5, 2020 Editorial, Albuquerque Journal pointed out a number of areas of concern and unanswered questions with Senate Bill 115. In a nutshell, and edited, those can be summarized as follows:
On January 1, 2021, if the law passes, existing medical cannabis retailers can begin selling to recreational consumers. The problem is January 1, 2021 is the same day all the rules and regulations on implementation and issuance of licenses and regulating sales must be in place. Simply put, 10 months is not enough time to promulgate such rules and regulations.
Local governments can’t ban any category of license but can limit activity to one business in each category and set zoning requirements which will likely result in a court challenges by competing businesses.
Licenses can’t be denied solely because someone has done time for “possession, use, manufacture, distribution or dispensing or the possession with the intent to manufacture, distribute or dispense a controlled substance.”
Customers have to be 21, but servers can be 18, and that is in conflict with liquor control laws that require both customers and servers to be 21.
Recreational buyers will be able to buy more cannabis than medical patients. Current law limits medical users to 8 ounces every 90 days while recreational users will be able to buy 2 ounces every transaction. Such a system is likely to result in major shortages for medical users.
Under the law, there is no increase in the number of plants growers are allowed and there is a cap of 500 plants that will lead to shortages.
Recreational use will be totally legal. This bill includes automatic expungement of marijuana arrests and convictions, strikes marijuana from the substances banned from drug-free school zones and says use cannot affect parole or custody cases.
Black-market marijuana sales won’t go away. A new Department of Justice report says state-level legalization actually gives criminal drug trafficking organizations cover for large grow operations.
The fact that the State has some of the highest DWI rates and opioid addiction rates in the country clearly complicates the legalization of recreational cannabis and the statistics will no doubt be used again by opponents of the legislation. Impaired driving is still a major concern. AAA says the number of traffic fatalities in which drivers tested positive for marijuana doubled in Washington state after legalization.
There is absolutely no mention of drug-free workplaces in the legislation, which is something the Governor’s canibus task force said it was recommending changes.
There are mentions of health risks in the law as written, but only for minors and in the medical section. Cannabis use, especially in chronic users, has been linked to schizophrenia, anxiety, depression, suicide, significant abnormalities in brain function and structure, and lower IQ.
Legalization of recreational cannabis will not raise that much tax money, and it’s already taken. “The bill’s Fiscal Impact Report says the 9% excise tax on recreational pot is expected to raise $24.5 million for the state in fiscal 2024 – all earmarked to seven funds directed at community grants, patient subsidies, substance abuse treatment, law enforcement, cannabis startups, workforce training and DWI education. Gross receipts taxes are projected to bring in $9.37 million to the general fund that year. Municipalities and counties are allowed to impose up to a 4% excise tax. Medical pot will be exempt from state excise tax and GRT.”
For the full, unedited Journal Editorial see:
COMMENTARY AND ANALYSIS
The 2020 New Mexico Legislative session is now at the halfway point and the cannabis legalization bill still needs to be heard by the Senate Judiciary Committee and, if passed there, move to the Senate Finance Committee. The Senate is the more difficult task because Senate moderate to conservative Democrats are known to vote often with conservative Republicans and vote no on recreational use legislation. If passed by the Senate, it then must be referred to the House for even more committee hearing an a final House Vote.
At this point in time, and with so many areas of concern, it is more likely than not that Senate Bill 115 will fail or not make it through both the Senate and House during the 30-Day session. As an alternative plan, the New Mexico Legislature needs to put the issue of legalization of recreational marijuana on the November, 2020 ballot. If passed by voters, enabling legislation can be enacted in the 2021 legislative 60 day session that will begin in January, 2021.
For a related blog article see: