New Mexico Rulemaking is First Step to Legalizing Adult-Use Cannabis

The New Mexico Department of Health will hold a public meeting on January 16, 2020 to discuss changes to the medical cannabis program. The regulatory changes are mandated by Senate Bill 406, which was enacted last year. The amendments enhance consumer protections, provide reciprocity with medical-marijuana states and permit consumption lounges.

The amendments also meet the recommendations outlined by the Governor’s Cannabis Legalization Working Group in its October 2019 report for legalizing adult-use cannabis. Governor Michelle Lujan Grisham, a Democrat, indicated that she would ask for legislation to legalize adult-use cannabis during the 2020 legislative session, which will open on January 21st. The deadline for introducing a bill will be February 5, 2020.

Governor Grisham established the bipartisan Cannabis Legalization Working Group in July 2019 to provide recommendations on legalizing cannabis in the state. The group issued a report in October 2019 that set out 5 main recommendations. The report states that the new industry will create over 11,000 new jobs, and produce over $380 million in revenues during the first year.

How does the medical cannabis rule amendment support legalization?

The Cannabis Legalization Working Group recommended five primary changes as a part of adult-use legalization including (1) strengthening labeling and testing requirements, (2) maintaining and enhancing the medical cannabis program, (3) creating a social equity program, and (5) addressing local control and employment issues.

The state’s medical cannabis program has made progress in two of these primary recommendations. On October 4, 2019, emergency regulations that established minimum labeling standards went into effect. The regulator’s current rulemaking efforts will further enhance these labeling requirements and establish a robust testing framework.

The New Mexico Department of Health has also taken steps to prepare the state for a recreational program. Over the past year, the state has increased plant production and enhanced cannabis manufacturing capacity.

In response to a court decision, thirty-four (34) of the thirty-five (35) licensees increased plant production from 14,500 to 39,400 during the March to September 2019 time period. The First Judicial District Court decided that the state lacked the authority under the Lynn and Erin Compassionate Use Act to impose its 450 plant cap unless it was based in fact. State regulators intend to retain tight control over inventory as a means of controlling the black market as it does not want an inventory glut that developed in Oregon.

The state also now has thirteen (13) licensed manufacturing facilities. The increased plant production, manufacturing facilities, and testing capabilities provide the basic footprint for an adult-use market.

What’s next?

The remaining question is whether the Governor can get an adult-use bill through the Legislature. The Albuquerque Journal reports that legalization will be difficult to achieve. The Legislature will have to act fast as the 2020 legislative session will end on February 20, 2020. The good news is that the work that is done this year will help the state get to a legal market sooner rather than later.

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