February 4, 2022

Senate committee approves cannabis law fix

The New Mexico Senate Tax, Business and Transportation Committee on Thursday approved a proposal that would make some minor changes to the state’s Cannabis Regulation Act, the law which legalized adult-use cannabis. 

SB 100, which the committee approved by a 7-3 vote, would most significantly increase production limits for cannabis microbusinesses from 200 plants to 1,000 plants. The proposal would also make technical changes to the law which would allow a cannabis business license holder to also have a liquor license, as long as the two establishments are separate. SB 100 would also allow the Regulation and Licensing Department, which oversees the Cannabis Control Division, to work in conjunction with the state’s Environment Department, which oversees food production safety, to better regulate the production of edible cannabis products.

The bill would also make tax-related changes like specifying tax rates for cannabis that is delivered across city or county lines and creating a path for existing non-profit medical cannabis businesses to become for-profit businesses. Prior to the Cannabis Regulation Act, which went into effect in June 2021, the state’s Department of Health required medical cannabis producers to be non-profit businesses. 

Regulation and Licensing Deputy Superintendent Victor Reyes, who helped present the bill, told the committee that the department helped the bill’s sponsor, Sen. Linda Lopez, D-Albuquerque, craft a bill that was restricted “to the most immediate needs.”

The significant production limit change for cannabis microbusinesses comes weeks after the Cannabis Control Division issued an emergency rule change that allows most other cannabis producers to increase production in order to avoid medical cannabis shortages when recreational-use sales begin in about two months. The Cannabis Regulation Act mostly left production limits to department rules, but specified production limits for microbusiness licenses. That means an equitable plant increase for microbusinesses requires legislative approval. 

The bill is supported by multiple cannabis businesses and on Thursday saw bipartisan support, with one Republican, Sen. Gay Kernan of Hobbs, voting in favor of it. 

But some Republican opposition during the committee seemed to highlight differing views between alcohol and cannabis sales. 

Sen. Ron Griggs, R-Alamogordo, expressed concern for an increase in commercial production of cannabis, while also allowing individuals to grow up to 12 plants at home. 

“One of the challenges with this thing, in the beginning, is we’re trying to set this up to where we have this new business in this market, but yet, then we turn around and we allow six plants per individual and 12 plants per family,” Griggs said. “It kind of defeats the business-side purpose to let that much other activity exist.”

New Mexico law allows for individuals to brew their own beer or ferment their own wine without a license or restrictions, as long as it is not sold. Further, Regulation and Licensing Department Superintendent Linda Trujillo said homegrown cannabis is expected to have little impact on commercial cannabis sales. 

Sen. Carrie Hamblen, D-Las Cruces, added that she and her wife have grown their own cannabis to help alleviate the symptoms of her wife’s traumatic brain injury and that most people will not end up growing mass quantities, even with the maximum 12 plants per household. 

“The reality is that you’re not going to get a ton of bud off of that unless you’re really good,” Hamblen said. 

Sen. Craig Brandt, R-Rio Rancho, also expressed concern with increasing plant limits, but mostly because sales have not started yet. 

“We haven’t even started yet, and we’re making a pretty significant change,” Brandt said. 

Trujillo said the department’s intention of allowing a microbusiness license was to allow smaller businesses a less cost-prohibitive entry into the upcoming cannabis market and that restricting those smaller businesses to 200 plants would not accomplish that. 

“In the same respect that we wouldn’t want to control how much beer an industry could produce once they’ve invested the money to produce it, we think that the 1000 plant count is a much more realistic number so that the business can actually help pay for the cost of opening the business and make a profit and have the ability to grow,” Trujillo said. 

The bill’s next stop is the Senate Judiciary Committee. From there, the bill still needs to pass the Senate as a whole, go through the House committee process and pass the House as a whole before the session ends in about two weeks.