Cannabis Regulation Act

NM signs intergovernmental cannabis agreements with two pueblos

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Gov. Michelle Lujan Grisham announced on Friday “historic” intergovernmental agreements with two pueblos that will allow the sovereign nations to take part in the state’s newly established recreational-use cannabis industry. 

According to the governor’s office announcement, leaders of the Picuris and Pojoaque pueblos each signed an agreement with the state that will “support the pueblos taking part in the recreational cannabis industry, driving economic development and setting guidelines for the safe production and sale of cannabis while preventing federal enforcement on their tribal lands.”

While the use, possession and home-cultivation of adult-use cannabis became legal last year and sales are slated to begin next week, cannabis is still illegal on the federal level. But the Cannabis Regulation Act, which is the law that legalized recreational-use cannabis, includes a provision that allows the state and tribal governments to enter into agreements like the ones announced on Friday. According to the announcement, the agreements between the state and the two sovereign governments are different from those in other states like Nevada. 

“These agreements not only formalize pro-tribal policies, such as a state duty to consult and incorporate tribal concepts and policies related to cannabis, but also are the only [intergovernmental agreements] in the nation that provide for ongoing meetings and consultations between state and tribe,” the announcement read. 

The Picuris Pueblo had previously tried to set up its own medical cannabis program after New Mexico legalized medical cannabis use, but the federal government shut the program down. Since then, there have been a few unsuccessful attempts by state lawmakers to pass a law allowing tribal governments to start their own medical cannabis program. Picuris Governor Craig Quanchello, through the governor’s office announcement, praised the agreement for respecting the Pueblo’s sovereignty, while also allowing collaboration between the two governments.

cannabis

Growing Forward launches fourth season

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Growing Forward, the collaborative cannabis podcast between NM Political Report and New Mexico PBS, launched its fourth season on Tuesday. 

With the first legal adult-use sales slated to begin on April 1, Growing Forward checked in with Kristen Thomson, the state’s Cannabis Control Division director, about a failed cannabis bill and what it means for the state’s cannabis industry.  

SB 100 would have increased production limits for smaller cannabis companies as well as allowed those businesses to sell products grown by larger production companies. The bill also aimed to clean up language in the Cannabis Regulation Act to allow legacy cannabis producers to switch their tax status from non-profit to for-profit. Up until last year, the state’s Department of Health, which oversees the Medical Cannabis Program, required medical cannabis producers to register as non-profit companies. “It’s certainly unfortunate that the statute was not amended during the session, but the Cannabis Control Division remains as committed as we ever have been in supporting small local entrepreneurs starting out in the industry,” Thomson said. 

But as far as businesses switching their status, Thomson said they will have to wait until the next legislative session to possibly get that chance. 

At the end of this year’s 30-day legislative session, one cannabis microbusiness told NM Political Report that there was an incentive to switch license types in order to grow more cannabis. Thomson told Growing Forward that the division plans on working out a way for those microbusinesses to change their business classification without having to go through the entire licensing process again. 

“The intent is not to make anybody go through the whole application process again,” Thomson said. 

But, she added, the Cannabis Control Division has to ensure the process is done in a way that can be tracked for auditing purposes.      

Part of the impetus of SB 100 was to create parity between larger producers with production limits regulated by rules and regulations and microbusinesses with production limits written into law.

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NM Supreme Court tosses cannabis tax case

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The New Mexico Supreme Court effectively ended a years-long legal battle over medical cannabis and taxes. 

In an order filed on Wednesday morning, the court wrote that a previous decision from the New Mexico Court of Appeals that medical cannabis was exempt from gross receipts taxes prior to June 2021 should be upheld. 

“Having considered the petition, response, and briefs of the parties, the judgment of the Court is that the writ shall be quashed as improvidently granted,” the court wrote. 

In other words, the high court should have never accepted the case. 

The lawyer for Sacred Garden, the medical cannabis company that sparked the legal battle, did not respond to a request for comment. 

Duke Rodriguez, whose cannabis company Ultra Health joined the case last year, told NM Political Report on Wednesday that he was “thrilled” with the high court’s decision. 

“I think it’s a recognition that the state never had the legal authority to collect gross receipts tax on the sale of [medical] cannabis,” Rodriguez said. “This finally rights that wrong.”

The issue of gross receipts tax, which is often incorrectly referred to as a sales tax, and cannabis goes back several years, and spans two gubernatorial administrations, when medical cannabis producer Sacred Garden requested a refund for the gross receipts taxes it paid to the state. Sacred Garden’s reasoning was that medical cannabis was essentially the equivalent to other prescription drugs, which are exempt from gross receipts tax. Through an administrative hearing, the state’s Taxation and Revenue Department, under then-Gov. Susana Martinez, denied the request. Sacred Garden took the issue to the New Mexico Court of Appeals, which ultimately ruled that a recommendation for medical cannabis by a qualified medical professional was the same as a prescription for other types of medication. 

In early 2020, the department, which was by then under current Gov. Michelle Lujan Grisham, challenged the court of appeals decision and filed a petition with the state supreme court.

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Recreational cannabis industry sparks struggle for water rights in parched New Mexico

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When New Mexico’s recreational cannabis bill was signed into law in April, Mike Hinkle and Ryan Timmermans jumped at the chance to get into the industry. The two business partners, both recent transplants from the South, bought portable buildings, seeds, grow lights and a property in the village of Carson, with a domestic well they thought they could use to irrigate their plants. In total, they invested more than $50,000. “That’s actually the most money I’ve ever had in my life,” Hinkle said. “I was extremely excited because we thought we had a shot.”

This story originally appeared at Searchlight New Mexico and is republished with permission.

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Growing Forward: Cannabis testing

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In two weeks, the New Mexico Regulation and Licensing Department, by law, must start accepting applications for non-medical cannabis cultivation licenses. But an often overlooked aspect of the cannabis industry is testing. 

The state Department of Health has long had a list of testing requirements for medical cannabis, but now that nearly all aspects of cannabis is overseen by a new department, lab operators like Barry Dungan of Rio Grande Analytics are anxiously waiting for new testing standards. Dungan began his career in cannabis testing after a stint as a researcher at New Mexico State University. He and his partners started Rio Grande Analytics in Las Cruces, but earlier this year, the company moved to Albuquerque to be more centrally located. 

Dungan told Growing Forward, the collaborative cannabis podcast between NM Political Report and New Mexico PBS, that he’s mostly still operating under the DOH rules, but that he needs advance notification of rule changes from RLD. 

“The stuff that we need to buy are things that are in state labs and crime labs and forensic labs,” Dungan said. “This isn’t, go to the used car lot and just get one.

Quick Reads

Growing Forward: New Mexico’s Green Rush Part 2

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About a month after New Mexico legalized cannabis use and possession, and about eight months until sanctioned sales are expected to start, there is little doubt that many New Mexican’s are eager to get a foothold in the state’s newest industry. 

The state’s Regulation and Licensing Department is still in the process of finalizing rules and regulations for cultivation licenses and is expected to impose further rules for testing standards, retail sales and consumption areas. But that hasn’t stopped some from preliminarily looking for warehouses or land to grow cannabis. Others looking to get into the cannabis industry have begun consulting businesses. 

Growing Forward, the collaborative podcast between New Mexico PBS and NM Political Report that looks at cannabis in New Mexico, spoke with several people hoping to get into the new industry earlier, rather than later. The day after the state’s Cannabis Regulation Act became official, P2M, a cannabis business consulting firm, hosted a legalization conference in Albuquerque. 

The company is made up of Albuquerque City Councilor Pat Davis, Matt Kennicott, who previously worked for former Gov. Susana Martinez and Patricia Mattioli, who has worked as a consultant for medical cannabis companies. 

Mattioli said there are numerous other parts of the cannabis industry that often go overlooked and that don’t need extra certification from RLD’s Cannabis Control Division.  

“You’ve got accountants, you’ve got insurance, you’ve got training,” Mattioli said. “So, the job creation that’ll go on for the next 10 years is huge.

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Growing Forward: Green Rush Part 1

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By law, the New Mexico Regulation and Licensing Department has about a month before it has to start accepting applications from businesses looking to enter the new, non-medical cannabis industry. The state’s Cannabis Regulation Act, which was signed into law in April, legalized the adult-use and possession of cannabis as well as home-cultivation. The new law also allows for commercial sales, but leaves much of the specifics up to rules and regulations. 

RLD has to start accepting applications for cannabis business licenses no later than Sept. 1 and start issuing licenses no later than Jan. 1, 2022.

Cannabis Control Division

State takes first steps to establish adult-use cannabis regulations

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On the first day of legalized, recreational-use cannabis in New Mexico the department set to oversee the new industry held a rulemaking hearing. 

During the hearing, held by the New Mexico Regulation and Licensing Department and its Cannabis Control Division, a long list of stakeholders shared their concerns about water conservation, racial and social equity and transparency. But the public comment included nearly as many questions for the department as there were concerns. 

As New Mexico struggles with yet another drought this year, many who spoke at the meeting raised concerns about large cannabis companies adding to the state’s ongoing water problems. 

Alejandría Lyons, the environmental justice organizer with the Southwest Organizing Project said she and the organization want to see more water-use oversight to protect the generations-old family farms across the state. 

“We worry about our acequias, we worry about our farmers who have already been asked not to water, to fallow their fields,” Lyons said. “And more importantly, we are very worried about the oversight. The Office of the State Engineer is already at capacity, and we fear that we need higher regulation to prevent illegal water use, especially in a drought year, as we’re seeing right now.”

Jaimie Park, the policy coordinator and staff attorney for the New Mexico Acequia Association said that although the Cannabis Regulation Act details water requirements like showing proof of access to water or water rights, she and the association would like to see deliberate rules regarding legal access to water. 

“It’s really important that the regulatory language mirror the statutory language so that this important water protection mandate is lawfully and meaningfully implemented through these draft rules,” Park said. 

Park added that she and the association submitted written comments with suggestions that RLD and the Cannabis Control Division add stringent water reporting requirements for cannabis cultivators. 

One of the major selling points during the special legislative session that resulted in the newly effective Cannabis Regulation Act was social justice and equity. The bill’s sponsors argued that legalization should also include a minimally restrictive path for New Mexicans to enter the industry.

Gary Johnson

Gary Johnson reacts to Legislature passing cannabis legalization bill

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Pending a signature from Gov. Michelle Lujan Grisham, New Mexico is set to become the latest state to fully legalize cannabis. And while the state has received an abundance of national attention for the feat, some may have forgotten or overlooked the national attention a former governor garnered more than two decades ago for his, then-controversial, stance that cannabis should be legalized. 

In the late 1990s, then-Gov. Gary Johnson, at the time a Republican, made national headlines for advocating for full legalization of cannabis, nearly seven years before the state would legalize medical-use cannabis and more than a decade before Colorado became the first state to legalize recreational-use cannabis. 

Since leaving office after his second term as governor, Johnson twice ran for president and once for U.S. Senate as a Libertarian. 

Johnson told NM Political Report that he’s not one to say, “I told you so,” but that he is proud of being an early advocate for full legalization. “I do take pride, and I would not mind my obituary, if anybody runs it, saying that ‘This was the highest elected official in the country to call for marijuana legalization for about 15 years,’” he said. “I mean, I think I held that title for about 15 years.”

Lujan Grisham called for a special session, in part, to legalize adult-use cannabis and expunge prior cannabis related criminal records. 

Much of the criticism from Republicans during the special session was that New Mexico is just not ready to legalize. But others, namely Sen. Cliff Pirtle, R-Roswell, argued that specifics of the cannabis industry should be left to the free market and not overly regulated by the state.

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Legislature sends expungement bill to governor’s desk

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A bill to expunge cannabis-related criminal offenses that would no longer be illegal if cannabis is legalized is headed to the governor’s desk. The effort began with 11 amendments in the Senate Judiciary Committee on Tuesday, which the committee later adopted as a committee substitute, and another on the Senate floor, a speedy move through the special legislative session. The Senate passed the bill on a 23-13 vote after about one hour of discussion early Wednesday afternoon. The House later passed the bill on a 41-28 vote after over an hour and a half of debate. The bill aims to automatically expunge the criminal offenses, under the state’s expungement law, that would no longer be illegal under cannabis legalization which was being debated by the Senate.