The legalization of recreational marijuana will again be introduced and considered by the New Mexico legislature when the 60-day legislative session starts on January, 19, 2021. The odds of a revised bill will make it to the Senate floor for a final vote have improved substantially because of the turnover in the Senate. New Mexico Democratic legislators backing and sponsoring the legalizing recreational marijuana believe they have an excellent chance to get the legislation passed in the 2021 session because Senate Democratic legislators who opposed marijuana legalization were defeated in this year’s primary election.
During the last two years, bills to legalize recreational cannabis have not gone forward in the Senate because 4 conservative Democrats formed a coalition with Republican Senators to oppose the legislation. Four conservative incumbent Democrats were ousted by progressive challengers in the June primary election and three progressive Democrats went on to win election to the Senate in the November 3 general election. Long time serving Democrats Senate Finance Committee Chairman John Arthur Smith, Senate President Pro Tem Mary Kay Papen, Clemente Sanchez of Grants and Senator Gabe Ramos of Silver City were all defeated in the June primary.
Last year’s defeat of the legalization legislation came after Gov. Michelle Lujan Grisham created a marijuana legalization working group or task force to study the issue. The group came up with recommendations that were later made part of proposed legislation. On Tuesday, November 10, New Mexico State Representative Javier Martinez, D-Albuquerque, the sponsor of last years failed legislation, said during a legislative committee hearing, he would again be introducing legislation for consideration. Martinez said he plans to introduce legislation that will be similar to a bill filed last year.
Rep. Martinez said the new 2021 bill would be slimmed down from last year’s version. Notwithstanding, Martinez said it will still contain provisions aimed at protecting New Mexico’s medical cannabis program. New Mexico’s medical program has more than 98,000 enrolled members. According to Martinez, some of the money generated by recreational cannabis sales would be used to eliminate the gross receipts tax on medical marijuana. Rep. Javier Martinez had this to say:
“I believe the time is now, I believe New Mexico is at the cusp of being a national leader in recreational cannabis legalization and am I looking forward to making that happen. … In 2021 we’re looking at streamlining the bill a little bit. That was one of the critiques we heard from some of the opponents, that the bill was too lengthy, too convoluted, so we’re streamlining that bill—but that bill will still be true to the core values.”
New Mexico House Speaker Brian Egolf, D-Santa Fe, for his part said he expects the House will pass a cannabis legalization bill during the upcoming 60-day session. Egolf said the bill will get a “much friendlier” reception in the Senate and said “I think its chances are much improved.”
Democratic state Sen. Jacob Candelaria of Albuquerque is a sponsor of past recreational marijuana and drug decriminalization initiatives and he had this to say:
“I think the prospect for a recreational bill to pass this year are looking much better. … What matters most is just the numbers in the New Mexico Senate. I think we just have better numbers.”
Candelaria, a medical marijuana patient himself and attorney who represents current cannabis business license holders, urged the Lujan Grisham administration to lift what he called artificial limits on medical marijuana production. According to Candelaria, the current plant limits on medical cannabis producers has led to chronic market shortages.
State Senator Mark Moores, R-Albuquerque was one of several Senate Republicans who filed a legalization bill in 2019 that called for state-run recreational marijuana stores. Moores said he was open to working with Democrats on new legislation in 2021 session.
Moores cautioned that for a bill to win bipartisan support it would need to allow businesses to maintain drug-free workplaces and include provisions for keeping cannabis out of young children’s hands. Moores had this to say in a Albuquerque Journal interview:
“I think there’s a number of senators and representatives on both sides who are willing to work on the issue.
PASSAGE NOT A SURE THING
Despite the confidence expressed by New Mexico State Representative Javier Martinez and Speaker of the House Brian Egolf, passage is still not assured. Last year’s House Bill was opposed by business groups and the state’s Conference of Catholic Bishops, who described the legislation as too far-reaching.
State Senator Bill Tallman, D-Albuquerque, expressed doubts during the November 10 meeting of the Economic and Rural Development Committee about how much money cannabis legalization could generate. Tallman challenged claims that the cannabis industry would create roughly 15,000 new jobs statewide by saying:
“I find it kind of hard to believe this is going to generate more jobs than oil and gas and their support industries. … I’m not convinced that we’re going to grow a lot of marijuana here because we have a shortage of water here, and it’s getting worse.”
Republican House minority whip Rod Montoya of Farmington said he is wary of efforts to commute sentences and expunge past drug convictions, arguing it would undermine efforts to stamp out smuggling and black markets.
NEW INDUSTRY BENEFTING ECONOMY
New Mexico already has a marijuana decriminalization law on its books. Last year, Governor Lujan Grisham signed into law a bill that made possession of up to a half-ounce of cannabis a civil offense punishable with a $50 fine. The governor and other supporters say legalization is still necessary, arguing it would generate tax dollars that could be used on public safety programs.
There are 15 states that have now legalized recreational marijuana or are in the process of doing so. The states of Arizona, Montana, New Jersey and South Dakota approved cannabis legalization measures in the November 3 general Presidential election. Mississippi approved the creation of a medical marijuana program. The Arizona passage gives urgency to the passing similar legislation in New Mexico to take advantage of the emerging market and demand. Governor Lujan Grisham and other supporters say legalization is still necessary, arguing it would generate tax dollars that could be used on public safety programs.
Texas has yet to pass legalization and it is anticipated that will benefit New Mexico’s economy. Duke Rodriguez, president and CEO of Ultra Health, New Mexico’s largest medical marijuana company told lawmakers at a recent legislative committee hearing that they need to think broadly about the future of New Mexico’s marijuana industry. According to Rodriquez, New Mexico will be “a production juggernaut” and a magnet for tourists and cannabis patients from Texas, despite federal prohibitions against transporting cannabis across state lines.
Advocates of recreational legalization argue it will generate at least 13,000 jobs and millions of dollars for the economy. Rodriguez, also told lawmakers that legalizing recreational marijuana will generate up to $800 million a year, a $200 million increase from the last years estimate of $600 million. Rodriguez had this to say:
“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.”
REVISITING 2020 LEGISLATION
Representative Javier Martinez said his new bill will aim to safeguard the state’s 13-year-old medical marijuana program from disruptions, levying taxes of up to 20% on sales and create business opportunities for minority and low-income communities adversely affected by the drug war and criminalization of marijuana. The bill has not yet been published. The contents of the failed 2020 recreational cannabis legislation merits review given the fact the Rep. Javier Martinez has said an attempt will be made to streamline it and keep the core concepts.
The legislation introduced in the 2020 legislative session was a cumbersome 173-pages long. A Cannabis Control Division of the Regulation and Licensing Division was to have been created and was to have very broad and extensive authority to regulate the industry. The division would have had the powers to promulgate rules and regulations, including many mandates and limitations on license issuance and quality control
The legislation would have legalized the 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 legislation proposed in the last session provided for taxes on recreational pot at roughly 17% to 19% and made medical marijuana tax-free and entirely subsides medical marijuana for low income patients.
The 2020 legislative session bill would have regulated both commercial and medical marijuana programs. The legislation avoided a traditional licensing system as is created for full-service alcohol licenses.
As was written, the recreational cannabis legislation contained 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 would not have been transferable from person to person, corporation to corporation or corporation to person. The licenses could not have been leased and was 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.
The legislation called for food-grade testing of marijuana products. The legislation if passed would have required all cannabis products sold in New Mexico to be tested and free from contaminants. Packaging would have been required to be clearly labeled with the THC dosage. The legislation also included restrictions on advertisements that target youth. The legislation required investments in training that would assist law enforcement officers in identifying impaired driving and not just limited to only cannabis-induced impairment.
The legislation did give local governments some authority to determine where cannabis dispensaries can be located. However, the state’s counties will not have been given any 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.
The legalization bill called for a 19% tax rate. Each county and city have varying gross receipts tax rates and the cannabis tax would have been 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 would have exempted residents in the medical cannabis program from the tax and would require cannabis growers to serve the medical market before the recreational market
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.
New Mexico doesn’t initiate legislation by ballot measures, though constitutional amendments are approved by referendum. If the 2021 NM Legislature were to enact legislation for a constitutional amendment for legalize recreational use of marijuana, voters would no get the measure for almost a full year. 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.
Links to related coverage and news sources are here: