On March 9,four major bills in the 2021 New Mexico Legislature made progress and are close to becoming law. This is an update on all 4 major bills.
OVERHALL OF LIQUOR LINCENSE LAWS
On Tuesday, March 9, the Senate passed HB 255 bill that is a dramatic overhaul of the state’s liquor laws. It will allow alcohol to be delivered to a person’s home, as well as expanding the state’s liquor licenses that would allow smaller restaurants to be able to sell more than just beer and wine.
HB 255 will allow package stores to apply for permits to deliver alcoholic drinks to customers’ homes. Restaurants will be allowed to take food and alcohol orders for home delivery.
The bill also creates a new licenses intended to make it easier for restaurants to serve spirits and mixed drinks not be limited to beer and wine.
Other provisions contained in HB 255 adopted by the Senate include:
Banning the sale of 3-ounce miniatures for off-site consumption. They would still be allowed at golf courses, hotels or other places where they can be consumed on site.
Lifting the prohibition on alcohol sales at stores before 11 a.m. Sunday.
Prohibiting the sale of hard liquor at convenience stores in McKinley County.
Stripping from the proposal an earlier plan to impose a 2% tax on retail sales.
The original House Bill and Senate amendments were hotly contested and debated. The changes in the current law were strenuously opposed by many liquor license owners who have paid high market values for the limited number of full service licenses available.
House Bill 255 is now headed to the governor for signature to become law. Governor Lujan Grisham administration is expected to sign the legislation after changes are evaluate given that the governor has been supportive of the overall reform effort.
COMMENTARY AND ANALYSIS
There is little doubt that the overall of New Mexico liquor licensing was long overdue. To be blunt, the state’s existing liquor licensing laws impairs economic development. The dispenser licensing law works against the small business owner or entrepreneur. As the market exists now, only out of state chain stores and restaurants, which are proliferating Albuquerque and squeezing out locally owned businesses, can afford whatever it takes to buy a liquor license.
Smaller, locally owned restaurants cannot compete nor afford to pay hundreds of thousands for a dispenser liquor license. Any average New Mexican who wants to open a new bar or restaurant with a full liquor license cannot do so because the cost of a liquor license is so prohibitive. Although there is a cap placed on the number of licenses that can be issued based on population numbers, there is no real evidence that fewer licenses reduce DWI rates and increase public safety in any meaningful way. The expansion and availability the new types of licenses will go a long ways to help New Mexico’s economy recover from the pandemic.
Links to more news coverage is here:
LEGALIZATION OF RECREATIONAL CANNABIS
On March 9, Senate Bill 288 and House Bill 12, two competing bills to legalize recreational cannabis, were approved by a New Mexico Senate Tax, Business and Transportation Committee. The bills are a little different but would essentially legalize recreational marijuana. The two bills passed the committee after lengthy debate with a few senators warning they could vote against one or both measures on the Senate floor.
Both bills were referred to the Senate Judiciary Committee for further hearing. Both bills risk being tabled as was done last year killing the bills. Legislators supporting legalization of recreational cannabis believe there are enough votes to pass a bill on the Senate floor if either of the two bills can get that far.
HOUSE BILL 12
HB 12 which passed the House last month was amended to restrict recreational cannabis licenses and impose a plant count limit, but only after conducting a market study. HB 12 would set a state excise tax of 8%, while cities and counties could impose additional 4% local option taxes on top of that.
Backers of the plant count limit argued that other states that have legalized recreational cannabis have had to deal with more tons of unsold cannabis because of over production. Critics say limits on licenses and cannabis supply could lead to market shortages, while benefiting certain smaller producers.
A few Republican senators criticized the “social justice” provisions in the House-approved bill which include expungement for cannabis possession convictions and a community grant funding to pay for education.
Representative Javier Martinez, who is sponsoring House Bill 12, said he is confident it still has time to get to the governor’s desk and said:
“This bill is also something that I’m very proud of because this is in the last few days of the session, this is really where the best minds from the House and the Senate can come together and get out a bill that we can all be proud of we can hopefully continue to move on and keep this discussion going.”
SENATE BILL 288
SB 288 deals with the creations of a state regulating commission set up and regulate the cannabis industry. As originally proposed, SB 288 called for a one-mile buffer between licensed cannabis dispensaries. It would also have allowed cities and counties to decide whether to allow dispensaries within their boundaries. Both provisions were removed from the bill. Notwithstanding, local governments could still decide where and how dispensaries could operate.
Under a change to the bill, the Regulation and Licensing Department would be able to restrict recreational cannabis licenses and impose a plant count limit, but only after conducting a market study. Critics say limits on licenses and cannabis supply could lead to market shortages, while benefiting certain smaller producers. Senator Gerald Ortiz y Pino, D-Albuquerque rejected the argument and said:
“It’s nice to say let the market decide, but that’s what got Oregon into a lot of problems,”
SB 288 would impose a lower state excise tax of 2%, while cities and counties could each tack on an additional 2% in local option taxes.
Senator Cliff Pirtle, R-Roswell, the main sponsor of SB 288 had this to say:
“The goal is to get cannabis as cheap as possible [in order] to drive out the black market.”
New Mexico already has a medical cannabis program with more than 100,000 enrolled members. In addition, Gov. Michelle Lujan Grisham signed into law a 2019 bill that made possession of up to a half-ounce of marijuana a civil offense punishable by a $50 fine.
Legalization supporters say now is the time for New Mexico to take the next step and join other state allowing legal-cannabis sales after years of debating the issue.
COMMENTRY AND ANALYSIS
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. Advocates of recreational legalization argue it will generate at least 13,000 jobs and millions of dollars for the economy. Legalizing recreational marijuana will generate up to $800 million a year, a $200 million increase from the last years estimate of $600 million.
Both HB 12 and SB 288 need to be enacted by the legislature in short order to avoid major problems and major delays in the future. HB 12 will ensure the legalization of cannabis without delay where sales can begin as early as January 1, 2022. SB 288 will allow the state sufficient time to establish a regulation and licensing department that will effectively tax and regulate the industry.
A commission is clearly needed for long term regulations that can be easily adopted to accommodate a developing and thriving industry. The major risk of failure of either bills will essentially delay the legalization of cannabis for upwards of two years, if not more. Even if a constitutional amendment is offered for consideration, the time delay would again be considerable, especially if it were to fail at the polls. New Mexico has wasted enough time and the legislature need to act now and pass both bills.
PUBLIC FUNDING FOR JUDICIAL OFFICES
On March 9, Senate Bill 160 that will allow State District Court candidates to avoid privately funded campaigns won Senate approval and will now go to the House for further hearings and a final vote if it survives committee review. The bill would make New Mexico the first state to extend public campaign financing to district judges.
Since 2008, New Mexico has had a publicly finance system for those running for Supreme Court and Court of Appeals seats public financing since 2008. SB 160 passed the Senate on a party-line 22-13 vote. All Senate Democrats present voted for the bill while all but one GOP senator voted in opposition to it.
The importance of the bill is that it would result in more transparency, reduce the appearance of impropriety of lawyers contributing to judicial campaigns of judges they appear before that gives an impression of a pay-to-play system of justice. To qualify for the public finance, candidates would have to obtain a number of small contributions from voters with the exact figure dependent on the judicial district they were running in.
Candidates for District Judge will get distributions from a public election fund that is financed in part by proceeds from unclaimed property, such as abandoned personal bank accounts and stocks. The amount of public finance candidates received will be based on numbers of registered voters eligible to cast ballots in their races.
A fiscal analysis of the bill estimated it could cost $950,000 to provide the public funds to an average number of District Court candidates during an election year.
A link to more news coverage is here:
COMMENTARY AND ANALYSIS
Public financing of Judicial candidates is long over due. There is no getting around the fact that judges, to be truly independent and fair and impartial, must be free of any possibility of being influenced by donations and the appearance of influence.
The 60-day New Mexico legislative session ends on March 19. Time is becoming critical on the legalization of recreational use of cannabis and public funding for judicial offices