Pub 18 2021 Issue 1

18 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S RECREATIONAL MARIJUANA PASSES IN NEW MEXICO By Mark Anderson, NMBA Legal and Legislative Assistant I n the wake of the COVID-19 pandemic and the subsequent economic fallout, many states are becoming more active and creative in promoting local economic solutions. Desperate times tend to force the hands of elected officials and inspire the quest for nontraditional solutions. In New York state, Governor Andrew Cuomo, facing multiple mushrooming scandals, decided to relent and sign a law that legalized recreational marijuana in his state, a logical move he was opposed to until he became desperate enough to relent. Here in New Mexico, however, our governor was the one pushing for recreational cannabis legalization, bringing the state’s Legislature back into Special Session to pass the legislation. New Mexico Governor Michelle Lujan Grisham listed marijuana legalization as a top priority entering the Legislature and, despite some hurdles, accomplished the goal. New Mexico becomes the 17th state to pass legalized recreational marijuana, the vast majority of which passed their laws through direct ballot initiatives. New Mexico joins Vermont, Illinois, and New York to pass legalization through the Legislature. Passing a somewhat controversial piece of legislation is more difficult in generally risk-averse legislative bodies than opening it up to the public in the form of a ballot initiative. The general public tends to want progress at a much faster rate than most of our elected officials, so the credit must go to Governor Lujan Grisham for taking a hardline approach and forcing the Legislature to pass something they weren’t able to during the regular session. This approach is the inverse to what many Americans are accustomed to seeing, which is elected officials regularly disregarding the desires of their constituents in favor of more powerful, organized interests. The result showed the Governor prioritizing a piece of legislation that is overwhelmingly popular with New Mexicans. In a poll from October 2020, 72% of New Mexicans indicated they favor recreational marijuana legalization. So, the bill made sense both from a policy perspective and a political perspective. It will create greater economic opportunities and social equity, and it has overwhelming public support. Lujan Grisham had been pushing for recreational legalization for multiple legislative sessions, but the economic difficulties created by the pandemic created a natural opportunity to make a case for legalization. In 2019, the New Mexico House approved a legalization bill that would have limited marijuana sales to mostly state-run stores. Frankly, the 2019 bill was somewhat ill-conceived and would have largely defeated the purpose of legalization. The 2021 legislation is far more comprehensive and economically viable. The provisions of the legalization bill include: • Adults 21 and older can purchase and possess up to 2 ounces of cannabis, 16 grams of cannabis concentrates and 800 milligrams of infused edibles. Licensed laboratories will test all products for contamination and potency. • Home cultivation of up to six mature cannabis plants will be allowed for personal use, provided the plants are out of public sight and secured from children. Households will be limited to 12 total plants. Marijuana grown at home cannot be sold or bartered. • Legal retail sales won’t begin for another year or so, with a target date of April 1, 2022, or earlier. Final license rules will be due from the state by Jan. 1, 2022, with licenses themselves issued no later than April 1. • Cannabis purchases will include a 12% excise tax on top of the state’s regular 8% sales tax. The excise rate will increase 1% each year, beginning in 2025, until it reaches 18% in 2030. Medical marijuana products, available only to patients and caretakers, would be exempt from the tax. • Legislators wanted to ensure medical patients can still access medicine after the adult-use market opens. The bill allows the state to force licensed cannabis producers to reserve up to 10% of their products for patients in the event of a shortage or grow more plants to be used in medical products. • There is no limit on the number of business licenses granted or the number of facilities a licensee could open under the program. However, regulators could stop issuing new licenses if an advisory committee determines that “market equilibrium is deficient.”