A cannabis legalization bill passed two committees, one on Tuesday afternoon and the other during the early hours of Wednesday morning. It’s slated for a floor debate next
HB 2, sponsored by Rep. Javier Martínez, D-Albuquerque, and Rep. Andrea Romero, D-Santa Fe, along with three other lawmakers, first passed the House Taxation and Revenue Committee Tuesday evening on a 8-4 vote. Then the bill passed the House Judiciary Committee early Tuesday morning by a 7-4 vote. Both votes were along party lines, with no Republicans voting for the bill and all Democrats voting in favor.
HB 2 is an altered version of a previous bill Martínez and Romero sponsored during the regular 60-day session and much of the debate and comments were also similar.
During the first hearing, Martínez took a moment to point out that this proposal has been in the works for years and has seen hours of debate.
“The bill before you, Madam Chairman, members of the committee, has been written and rewritten and amended and subbed out for many, many years,” said during the tax committee debate.
One of the more significant changes made since the regular session is a compromise of sorts on plant limits for cannabis producers. Originally, the bill proposed during the regular session specifically barred the state from implementing production limits. It was later changed, at the urging of the state’s Regulation and Licensing Department, to allow the state to cap plants based on market studies. Now, again with the support of the department, the state can implement a plant limit, but only until 2025.
Linda Trujillo, the superintendent of the Regulation and Licensing Department, said the new limit structure was a “balancing act” and that the department tried to come up with a way to make sure there is enough cannabis available for medical patients.
“But on the other side of that,” Trujillo said, “How do we ensure that small farmers and small businesses have a little bit of an opportunity to enter into the market before the market is flooded with individuals who are already prepared to increase their growth and production?”
Trujillo cited other states like Illinois that experienced almost immediate shortages after the state legalized cannabis and called it the “Krispy Kreme phenomenon,” referring to long lines at the popular doughnut chain.
The bill also went through a series of changes in the first two committees.
One amendment, from one of the bill’s co-sponsors Rep. Deborah Armstrong, D-Albuquerque, specifies that even in cannabis consumption areas smoking cannabis must be done in a designated area.
Another amendment, from House Judiciary Chair Gail Chasey, D-Albuquerque, specifies that while cannabis use alone would not justify authorities taking custody of a person’s child, law enforcement, the Children Youth and Families Department and the courts can still intervene if it’s in the child’s best interest.
Rep. Christine Chandler also successfully amended the bill to increase the proposed cannabis excise tax from 12 percent to 18 percent over a five-year span. If passed, HB 2 would impose the original 12 percent tax, but starting in 2025, the rate would increase one percent for six years. Leading up to and during the regular session, Martínez maintained that studies have shown that cannabis tax rates are most effective when they don’t increase past 20 percent. Depending on the county, gross receipts taxes combined with the excise tax could push the total tax to 25 percent. Numerous economic experts around the country have found tax rates that are too high drive consumers to the illicit market, while tax rates that are too low don’t produce enough revenue for states to benefit from sales.
Nearly all of the criticism of the bill came from Republicans in both committees and a few of them unsuccessfully tried to add their own amendments to increase penalties for illegal cannabis use and allow counties and municipalities to opt-out of cannabis sales. The bill is expected to be debated on the House floor Tuesday morning. From there it is expected to go directly to the Senate floor where it will be considered alongside another legalization bill, sponsored by Republican Sen. Cliff Pirtle, R-Roswell.