New Mexico Governor Michelle Lujan Grisham assembled a panel of experts tasked with crafting a report to detail their recommendations for a marijuana legalization plan in 2020 — their report was released on October 16, 2019.
The report gives lawmakers a road map to follow during the 30-day legislative session in January, and Gov. Lujan Grisham has already acknowledged that she plans to use that time to discuss marijuana reform proposals. In New Mexico, the governor determines what major policy issues are heard during abbreviated legislative sessions in even-numbered years. This means New Mexico could be the 12th US state to legalize recreational marijuana next year.
Still, Lujan Grisham has specified that her support for recreational marijuana is dependent on certain stipulations, including protecting the medical marijuana program, securing ways to ensure roadway and workplace safety, as well as implementing safeguards through clear labeling standards and strict advertising laws.
The recommendations come after efforts to legalize fell flat in the Senate earlier this year when the Cannabis Regulation Act, House Bill 356, failed to produce the necessary votes to move forward. While many of the recommendations from the panel are based on HB 356, additional provisions were also added.
New Mexico Marijuana Legalization Recommendations
The report closely assessed every component of the recreational marijuana market from packaging to tax allocation and social equity.
“What we’re trying to do is not replicate the bad models and to do something different,” stated an Albuquerque city councilor and leader of the panel, Pat Davis. “As our report makes clear, New Mexico can and should learn from missteps in other states and we have both the ingenuity, talent, and healthy level of skepticism required to get it right.”
According to an independent economist, the state would gain an estimated 11,000 jobs with sales reaching over $600 million after five years. The tax revenue from recreational cannabis sales would total around $100 million annually.
The panel aimed for a total tax rate under 20 percent for recreational marijuana, with the goal intended to be closer to 17 percent — including a suggested 10 percent excise tax combined with sales and business taxes.
Currently, medical marijuana is taxed at about seven percent, but under the new legalization proposal, it would become tax-free for patients. Recreational marijuana businesses would also be mandated to serve the medical marijuana market first, which means giving priority to patients when supplies become scarce — a common issue in the current medical program in the state.
Furthermore, the proposal outlined a plan to set aside millions of dollars from recreational revenue for a cannabis subsidy for low-income patients with qualifying medical conditions. “That’s a real incentive for patients to stay in the program,” said Davis, who likened the idea to “Medicaid for marijuana”.
Proposed New Mexico Recreational Marijuana Business Licenses
The panel also recommended that recreational marijuana businesses maintain the current licensing structure as the state’s medical cannabis program. Cultivators, manufacturers, retailers, couriers, and testing labs would be able to become licensed through a state application process.
License fees would remain low, at $500/month or $6,000/year, to ensure accessibility and social equity. The low-cost entry fee allows for better overall access to the industry for low-income and small family businesses.
An integrated micro-business program was also proposed, which would help vary license opportunities and allow entrepreneurs the chance to enter the market as well — these businesses would only be allowed one location for cultivating, manufacturing or dispensing.
Additional recommendations from the panel are as follows:
- The state would prohibit jurisdictions from refusing cannabis business, which could help deter illicit markets. Conversely, communities would still be allowed to impose some regulations such as hours of operation and zoning restrictions.
- Some revenue would be designated to support housing, job preparation and education programs state-wide.
- Marijuana products would be tested and clearly labeled to reflect accurate dosing of psychoactive THC to reduce hospital visits linked to unintentionally consuming high doses of THC.
- Policies restricting advertising by prohibiting marijuana ads on television, radio and mobile devices would also be enacted.
Gov. Lujan Grisham will now review the recommendations and implement them into balanced legislation for the January 2020 legislative session. While it remains to be seen which recommendations will be deemed permissible, New Mexico is now one of several states vying to hold the most comprehensive legalization model in the US — only time will tell if they are able to earn the spot.
Prepare for New Mexico Marijuana Business Opportunities
It’s never too early to begin preparing for recreational marijuana business opportunities in New Mexico. To get ahead of the game, download our New Mexico Marijuana Business Starter Package which includes:
- An informational PDF on New Mexico’s current marijuana laws and business licensing details
- An Application Guide & Checklist for a detailed summary and checklist of over 100 action items you'll need to complete before submitting your application
- A Business Plan Template to help you draft an executive summary for your business
- A Financial Plan Template to give you and your investors a comprehensive 3-year projection of what to expect when operating a medical marijuana business