December 29, 2020

NM cannabis industry group gives priorities for a legalization bill

It is likely that the general public will not see drafts of recreational-use cannabis legalization proposals from the legislature until next month, but one group is already suggesting language and looking for a legislative sponsor. 

The New Mexico Cannabis Chamber of Commerce publicly released an early of a recreational-use cannabis bill that they say highlights what those in the industry see as important issues. The chamber is made up of more than 40 cannabis organizations, ranging from educational and legal groups to actual cultivators and dispensaries. 

The chamber’s director, Ben Lewinger, said the group worked tirelessly to come up with language that puts the state first. 

“Our members have an agreement that what’s best for their individual companies right now is not necessarily what’s going to be best for the future of cannabis in New Mexico,” Lewinger said. 

The chamber’s early draft includes portions that were included in previous legislation, but also adds to them. 

One issue that has been publicly discussed, but not included in previous attempts is how to ensure cannabis businesses are mostly local. 

The chamber’s proposed solution is to only allow businesses with at least 60 percent of the company owned by those who have lived in the state for two years. Lewinger said the chamber wanted to ensure New Mexicans have a stake in cannabis sales, but also not hinder the flow of capital from outside the state. 

“We were trying to strike a balance between it being a true homegrown New Mexico industry, but not limiting the ability for out-of-state money to come into a New Mexico run company,” he said. 

Oklahoma, which only has a medical cannabis program, albeit one of the most prosperous in the country, has a provision that requires 25 percent of ownership is locally based. But Oklahoma is also facing a legal challenge in federal court over that requirement. Lewinger said given the pending Oklahoma case, he wouldn’t be surprised if New Mexico faces a similar challenge, if the bill moves forward as written.

“The language may not be perfect and there may be some potential challenges, but it was important enough to include even if it’s not perfect,” Lewinger said. 

Economic experts have estimated that New Mexico could eventually see $100 million in cannabis tax revenue annually. And as Arizona moves forward with voter approved legalization, there may be concerns about keeping New Mexican’s money in the state.

Another change in the chamber’s draft is a simplification of the tax structure for recreational-use cannabis. Medical cannabis producers in New Mexico are currently charged gross receipts taxes and it’s up to those producers whether they want to pass gross receipts taxes on to patients. But the chamber’s proposal would eliminate gross receipts taxes on medical cannabis and apply a 20 percent tax on recreational-use cannabis. And instead of earmarking money for specific agencies like law enforcement or education, the tax revenue would largely go to the municipalities or counties in which producers operate. 

Most of the draft language from the chamber has been covered in previous legalization bills, like protecting the state’s current medical program. 

Besides lawmakers who are flat out opposed to cannabis legalization, any proposal will also face the critical eyes of current patients who are concerned with medical cannabis shortages. 

The chamber’s fix for that is to require cannabis producers to prioritize medical supply if recreational cannabis supplies run low. 

Lewinger said for patients who rely on a consistent supply of medicine for relief need to know that their access is not hindered if full-legalization goes into effect.

“It’s just really important, that at no time, that supply for patients is ever at risk. It’s kind of on the dispensaries and the system as a whole to ensure that if that supply is at risk, then there are no recreational sales until there’s enough to ensure that everybody has their medicine,” Lewinger said. 

Medical cannabis shortages were reported in nearly every state that legalized recreational-use within days of legalization going into effect. 

Another provision similar to other efforts is a proposed ban on home grows for anyone but patients who have a Personal Production License. Lewinger said he doesn’t think lawmakers are quite ready to approve personal grows of cannabis outside the medical program. But, he said, those Personal Production Licenses can serve as a proverbial carrot on a stick that may encourage patients to stay in the program. 

“If you want a [Personal Production License] then you should do it through the medical program,” he said.  

In an episode of Growing Forward, a collaboration between NM Political Report and New Mexico PBS, Lewinger spoke about the potential of a general wellness model being added to the state’s medical cannabis program, which, in theory, would allow for patients who do not have a qualifying condition, but may generally benefit from medical cannabis. That’s largely how Oklahoma’s medical cannabis program works. Patients there only have to have a doctor’s recommendation that cannabis is beneficial to the patient’s health. Lewinger said the chamber would support a measure like that, but is not currently planning on drafting anything related to a general wellness model. 

Other parts of the chamber’s proposal that have been in previous attempts include subsidizing the medical cannabis program in the form of a medical cannabis assistance program for low-income medical cannabis patients. 

Lewinger said legislative bill drafters are working on a finalized version of the bill and that the chamber is still looking for a bill sponsor.