On March 31, New Mexico became the 18 state to legalize recreational cannabis. On Tuesday, March 30, House Bill 2, a 178-page bill, cleared the state House 38-32. On Wednesday, the bill passed the Sente on a 22-15 vote. Two Senate Democrats Roberto “Bobby” Gonzales of Taos and Shannon Pinto of Gallup joining with Republicans in voting “no”.
New Mexico already has a medical cannabis program that has more than 107,000 enrolled patients.
HIGHLIGHTS OF LEGISLATION
Major highlights of the enacted House Bill 2 are:
The sale of recreational cannabis will be legal in May, 2022.
The bill allows people 21 years or older to buy, possess and use marijuana outside the home up to 2 ounces of marijuana. People will be able to buy no more than 2 ounces of cannabis or 800 milligrams of edible cannabis. There are also limits on extracts. It is estimated that sales will generate more than $300 million in revenue for the state.
The state will regulate all sellers and there will be no limits on the number of licenses issued. This is a dramatic departure from the limited number of licenses available in liquor licenses which have a cap based upon population.
There will be a cap on the number of plants sellers can grow.
People who have been convicted of possessing it for personal use will have their criminal record expunged.
Cannabis establishments could also offer on-site consumption in certain circumstances.
Households would be permitted to grow up to 12 mature plants for personal use.
Local jurisdictions, city and counties, cannot opt out of commercial sales, but can establish restrictions on operating hours and locations. The legislation give local governments some authority to determine where cannabis dispensaries can be located.
The state’s counties will not have the 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 state would levy a 12% excise tax on sales to start, and the tax would grow to 18% over time. Gross receipts taxes would also be added on, pushing the total tax rate to 20%. There will be a maximum 20% tax on it.
The sponsors of the legislation are Rep. Javier Martinez, Rep. Andrea Romero, Rep. Debbie Armstrong, Sen. Linda Lopez, Sen. Katy Duhigg and Sen. Jerry Ortiz y Pino.
Main sponsor Rep. Javier Martinez (D- Albuquerque) had this to say about the passage:
“I’m just very excited for the people in the state of New Mexico. … I think the people deserve a big transformative win like this one. I can’t wait for this industry to get to work and create jobs and bring revenues for our state.”
After passage Governor Michell Lujan sent out the following statement:
“This is a significant victory for New Mexico. Workers will benefit from the opportunity to build careers in this new economy. Entrepreneurs will benefit from the opportunity to create lucrative new enterprises. The state and local governments will benefit from the additional revenue. Consumers will benefit from the standardization and regulation that comes with a bona fide industry. And those who have been harmed by this country’s failed war on drugs, disproportionately communities of color, will benefit from our state’s smart, fair and equitable new approach to past low-level convictions.
There were more than a few significant breakthroughs in the 60-day session. This is yet another one. As New Mexicans know, I have advocated and pushed and negotiated for this measure, and I am immensely proud and humbled to have seen it through. But that feeling is dwarfed by the gratitude I feel for the well-informed advocates, to the community members from all across the state – urban and rural, from every region– who have been committed to lobbying for this, to the leaders in the Legislature who helped us cross this major threshold.
This is a good bill. This special session was a success. And the work of making sure that this industry is a success, that New Mexicans are able to reap the full economic and social benefit of legalized adult-use cannabis, that workplace and roadway safety are assured to the greatest degree possible – that work will go on. Change never comes easily and rarely does it occur as quickly as we might like. But with this major step forward, we are signaling more clearly than ever before that we are ready, as a state, to truly break new ground, to think differently about ourselves and our economic future, to fearlessly invest in ourselves and in the limitless potential of New Mexicans.”
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EXPUNGEMENT OF MARIJUANA CONVICTIONS
On Wednesday March 31, the special session of the legislature also enacted Senate Bill 2 that will wipe certain cannabis-related convictions off New Mexicans’ criminal records. The Senate voted 23-13 along party lines to pass the legislation with majority Democrats voting in favor and Republican’s casting “no” votes. Senate Bill 2 also cleared the House on a 41-28 vote.
The expungement of records legislation is a companion measure to separate legislation that would legalize possession of up to 2 ounces of cannabis outside the home. The approved legislation orders the expungement of criminal records for marijuana-related offenses that would fall under the separately proposed cannabis legalization law. It also authorizes the release of New Mexicans jailed for minor cannabis-related offenses, though it is unclear exactly how many inmates might be freed.
The burden for reviewing criminal records for expungement eligibility will fall largely under the Department of Public Safety and the state’s court system. Department of Corrections spokesman Eric Harrison said that just 50 inmates at state prisons were incarcerated on charges that included marijuana possession, but none of them was in custody solely because of pot possession.
ELECTIONS HAVE CONSEQUENCES
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 all 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.
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 17 other states that have now legalized recreational marijuana The states of Arizona, Montana, New Jersey and South Dakota approved cannabis legalization measures in the November 3 general Presidential election. On March 31, the state of New York legalized recreational cannabis. Mississippi has approved the creation of a medical marijuana program.
The Arizona passage gave 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.
Duke Rodriguez, president and CEO of Ultra Health, New Mexico’s largest medical marijuana company told lawmakers during legislative committee hearings 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.”
COMMENTARY AND ANALYSIS
After a full two years of debate and past efforts to legalize recreational cannabis, its passage was long overdue. The enacted legislation was well thought out and takes the approach of legalize, regulate and tax.