Senate passes cannabis law changes, adds new water rights language

The New Mexico Senate approved a bill late Monday night that aims to clean up language of the state’s Cannabis Regulation Act, increase production limits for small cannabis companies and allow those smaller companies to wholesale cannabis to and from other cannabis businesses. 

The most significant changes SB 100 proposes are increasing plant limits for cannabis microbusinesses from 200 to 1,000, allowing those types of businesses to buy, sell and transport cannabis from other companies and allow medical cannabis companies that were previously required to be registered as nonprofits to become for-profit companies. 

After an amendment in a committee hearing the day before, nearly all of the debate on the Senate floor was devoted to water issues, even though the original bill did not address any changes related to water.    

Earlier this week, a Senate committee approved an amendment that stripped a water right verification section from the Cannabis Regulation Act. 

During a Senate Judiciary Committee, Sen. Cliff Pirtle, R-Roswell, proposed removing the section, calling it “unnecessary red tape.”

“There’s one instance of a constituent of mine that was trying to get licensed and they tried to transfer ownership into a separate business so that it didn’t put his farm into liability,” Pirtle said on Sunday. “And it became problematic to prove who has the legal right, who’s supposed to have it, who’s leasing from whom.”

Sen. Katy Duhigg, D-Albuquerque, who works as a cannabis attorney, agreed with Pirtle. 

“We have hamstrung this industry with the approach that we took to water in the bill last year,” Duhigg said on Sunday. “I think we got it wrong, frankly, last year, with what we did with water.” 

Sen. Linda Lopez, D-Albuquerque, unsuccessfully tried to further amend the bill to include what she said was a compromise in verifying legal water access. Her amendment, she argued, would only require that a cannabis company “demonstrate” that it has legal access to water. But after about an hour of debate, her amendment failed on a 19-20 vote, with a number of Democrats voting against it. 

Most of the pushback on the amendment came from Pirtle who reiterated his comments from the previous day, arguing that it’s already illegal to use water for any agricultural use without legal access to it. 

“You have a water right or you don’t have a water right,” Pirtle said.

Senate committee approves cannabis law changes

The New Mexico Senate Judiciary Committee on Sunday moved a cannabis clean-up bill forward with a 6-3 vote. 

SB 100 aims to amend the Cannabis Regulation Act by doing several things, including increasing production limits for cannabis microbusinesses from 200 to 1,000 and allowing microbusinesses to wholesale products. 

During the committee hearing, Regulation and Licensing Superintendent Linda Trujillo told committee members that increasing production limits for cannabis microbusinesses will help to ensure there is enough medical cannabis in the state for the patients that rely on it. She said her department and its Cannabis Control Division originally planned on all cannabis producers subscribing to the maximum number of plants. The department recently issued an emergency rule change that raised plant limits for most producers from 10,000 to 20,000. 

“The analysis was based on all [producers] just biting at the bit and waiting to go up to the amount of 10,000,” Trujillo said. “Come to find out they weren’t because the cost was too high.”

Trujillo added that with only a handful of producers maxing out their supply limit, medical cannabis supplies could be threatened. Further, she said, raising production limits for larger producers posed an equity problem for microproducers, whose production limits are written into law and not department rules. 

“Now when you start comparing a business that can do 20,000, in comparison to a business that can do 200, there is just no equity there, there really is just no equity there, it’s almost impossible to compete like that,” Trujillo said. 

Republican committee members unsuccessfully tried to add amendments that would limit which types of companies microbusinesses can engage in wholesale transactions with and remove language that allows non-profit cannabis companies to become for-profit companies.

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.

Gov. Lujan Grisham gives OK for legislature to make some cannabis law changes

In addition to high-profile efforts to improve public safety and education, Gov. Michelle Lujan Grisham has called on lawmakers to address cannabis during the 30-day legislative session. 

Lujan Grisham issued a message on Thursday afternoon, authorizing lawmakers to add changes to the Cannabis Regulation Act to the legislative agenda. 

The governor’s message pertains to SB 100, which is sponsored by state Sen. Linda Lopez, D-Albuquerque. The bill, if passed, would increase production limits for cannabis microbusinesses, allow state regulators to require education requirements for cannabis servers, allow liquor license holders to also obtain a cannabis business license and allow some cannabis businesses to employ workers who are under 21, but over 18 years of age, as well as other changes to the law. 

The state’s Cannabis Control Division announced earlier this week that it planned to work with the governor and lawmakers to increase plant limits for cannabis microbusinesses as a way to combat expected shortages in April when sales are expected to begin. The division also announced an emergency rule change for non-microbusinesses, but production limits for smaller operations are written into statute. SB 100 proposes to increase plant limits for microbusinesses from 200 to 1,000 mature plants. The bill would also allow cannabis businesses that previously only sold medical cannabis to employ workers who are 18 years of age.

NM cannabis regulators temporarily increase production limits in an attempt to avoid shortages

With a little more than two months before recreational-use cannabis sales are expected to start, the New Mexico Cannabis Control Division issued an emergency rule change that doubles plant limits for cultivators. 

The emergency rule change, which went into effect last Thursday, increases the maximum amount of mature cannabis plants for producers from 10,000 to 20,000. 

In documents filed with the state’s Commission of Public Records, division director Kristen Thomson justified the emergency rule change. 

“The Division has considered demand estimates provided by applicants and licensees in the cannabis industry,” Thomson wrote. “Projected market demand shows that the demand for regulated cannabis will increase year-to-year as more cannabis consumers move from the illicit market to the regulated market. The supply of medical cannabis will become increasingly threatened without an adequate supply of plants.” 

Cannabis production limits have been an issue in New Mexico since nearly the inception of the state’s Medical Cannabis Program. One of the state’s more prominent cannabis producers, Ultra Health, has battled with the state in court for years over plant limits. In 2015 the New Mexico Department of Health, which oversees the Medical Cannabis Program, increased production limits from 150 to 450 mature plants, per producer.

2021 Top Stories #3: Cannabis legalized

See our entire countdown of 2021 top stories, to date, here. One of the most notable things that happened in 2021 was the legalization of recreational-use cannabis. 

The use of medical cannabis has been legal in New Mexico for more than a decade, but full legalization did not become a reality for New Mexico until earlier this year, during a special legislative session devoted mostly to legalization. Weeks before, during a regular legislative session, lawmakers were unable to come up with a version of a legalization bill that would address everyone’s concerns. Ultimately, the effort in the regular session stalled in a key Senate committee. 

But the special session proved to be a success for proponents of cannabis legalization and Gov. Michelle Lujan Grisham signed the bill into law in April. But even as it looked like legalization was on the horizon, there were still many concerns about how legalization would impact rural communities in the northern part of the state. 

Of course, New Mexico couldn’t legalize cannabis without former Gov. Gary Johnson weighing in.

NM cannabis regulators to hold hearing on packaging, ad rules

The New Mexico Cannabis Control Division will hold a public rulemaking hearing next week regarding rules and regulations for labeling and marketing cannabis products, as well as health and safety protocols for packaging edible and topical cannabis products. 

The hearing will take place on Dec. 30 and the division has already started accepting written comments and will accept them until the end of the hearing. Oral comments can also be made during the hearing. 

The proposed rules would prohibit cannabis companies from advertising or marketing their products “on radio, television or other broadcast media, internet pop-ups and mass transit vehicles.” 

An exception to that rule would be for subscription broadcast services where subscribers are at least 21 years old. Advertisements that are on “billboards, posters, handbills or other visual media” that are within or can be seen within 300 feet of a school, church or daycare would also be prohibited under the proposed rule.  

The proposed rules would also prohibit the likeness of a celebrity or images that “are commonly used to market products to minors.”

Overall, the rules would prohibit branding that targets minors under 21, including branding that resembles products that are normally marketed towards kids. 

The rules would also create a general serving size of 10mg of THC for edibles and consumption areas would be required to provide a way to measure out a serving size if an on-site consumable product is packaged as more than one serving. Consumption areas would also be able to sell unlabeled cannabis products as long as a menu is provided with potency information.

Bernalillo County passes ordinance banning outdoor cannabis consumption areas

The Bernalillo County Commission unanimously approved an ordinance on Tuesday that bans outdoor cannabis consumption areas in parts of the county not already governed by the City of Albuquerque. 

An earlier version of the proposal would have made a distinction between medical and recreational-use cannabis consumption areas as well as prohibited multiple cannabis production and manufacturing in one place. The commission ultimately amended the ordinance to eliminate the distinction between the two types of cannabis use and allow integrated cannabis businesses to perform multiple operations in one location, after securing a special-use permit. 

But even with the amendments, the ordinance would still prohibit outdoor cannabis consumption areas. 

Bernalillo County Zoning Administrator Nicholas Hamm told commissioners that the intention of the legislation was to “create an environment that’s separated from the public broadly, because this is still a controlled substance, and it has some intoxicating effects, so that adults can do that within a building and behind a carbon filter.”

None of the commissioners took issue with prohibiting an outdoor consumption area, but Erica Rowland, a medical cannabis patient advocate and cannabis business license hopeful, spoke out against the consumption area portion of the proposal. Rowland praised the commission for adding a special permit option for multiple cannabis uses, but said she was worried about the consequences of requiring businesses licensed as consumption areas to keep smoking inside. “I’m very concerned with outdoor consumption not being allowed,” Rowland said. “The indoor consumption-only language is very restrictive.

NM cannabis regulators now accepting all types of business applications

The New Mexico Regulation and Licensing Department and its Cannabis Control Division announced on Tuesday that it would start accepting applications for all cannabis businesses. The department and its cannabis division has already been accepting applications for cultivation licenses, but in the announcement on Tuesday, the department said it is accepting all business applications as a way to “streamline the licensing process.”

“The Cannabis Control Division’s licensing system is open for business,” Regulation and Licensing Superintendent Linda Trujillo said in a statement. She added that the department is expanding its “user-friendly online platform” in order to get ahead of the process of licensing businesses. 

While the department will start accepting applications for manufacturing, retail and testing licenses, rules and regulations for those license types have not been finalized, so those licenses will not be issued until rules are promulgated. 

Cannabis Control Division Director Kristen Thomson, in a statement, said the division decided to move forward with accepting applications after hearing concerns about hitting the ground running.  

“After hearing stakeholders’ enthusiasm for standing up this industry as soon as possible, we are instituting this new licensing process to help businesses, entrepreneurs and communities maximize the economic opportunities this new industry is creating,” Thomson said. RLD and CCD have already issued at least one cultivation license and by law, recreational-use cannabis sales have to begin no later than April 1, 2022.

NM Cannabis Control Division considers requiring union agreements as part of licensure

As part of the process to set up a recreational-use cannabis industry in New Mexico, the state’s Regulation and Licensing Department and it’s Cannabis Control Division held a public rulemaking hearing on Wednesday regarding residual solvents in cannabis manufacturing and requiring employers to work with labor unions. The proposal to require cannabis businesses to enter into a labor peace agreement with a labor union, as a condition of state licensure, did not receive much support during the hearing. 

Out of the handful of people who testified during the hearing, only one person spoke about allowable solvents used to manufacture cannabis extracts and only one person spoke in favor of the labor peace agreement proposal. 

The labor agreement proposal, if approved by RLD Superintendent Linda Trujillo, would require employers to enter into an agreement with a “bonafide labor organization that is actively engaged in representing or attempting to represent the applicant’s employees,” and that agreement would have to be “an ongoing material condition of licensure.”

But the proposal would also prohibit a labor union from organizing protests against the company. 

“For purposes of this section, a labor peace agreement between a cannabis establishment and a bona fide labor organization includes protecting the state’s interests by, at a minimum, prohibiting the labor organization from engaging in picketing, work stoppages, or boycotts against the cannabis establishment,” the proposal reads. 

Timo Serna, who said he was in favor of requiring labor agreements during his testimony and that he plans on opening a cannabis microbusiness with the hopes of expanding, argued that prohibiting strikes and walk-outs strips the rules of any effectiveness. 

“That basically takes away all the power that the employees have and being a part of a union becomes largely symbolic, because all that’s governing that is pieces of paper at that point,” Serna said. “There’s nothing else that is going to ensure that employees’ voices are going to be heard.”

Besides the one comment on solvents, all of the other participants argued that mandating a labor union agreement as a condition of licensure is a regulatory over-step by the department. 

Duke Rodriguez, the CEO and president of Ultra Health, one of the state’s more prolific medical cannabis producers, argued that not only is a required labor agreement an overstep but that it is illegal and hinted that it would likely open the department to a lawsuit.  

“This mandate is punitive to a new industry,” Rodriguez said. “How would other industry professionals respond if labor peace agreements were mandated for every license RLD currently manages? There would be an uproar.”

Rodriguez added that Ultra Health is “committed to workplace well-being” and that starting next year the company will start paying its 300 employees at least $15 per hour. 

Kristina Caffrey, a lawyer for Ultra Health also spoke about the legality of mandating labor agreements.