As New Mexico moves toward recreational cannabis legalization in 2021, questions continue to swirl about how revenues from a legal cannabis market should be spent.
Last year’s failed legalization bill would have paved the way to using cannabis dollars to help shore up New Mexico’s bleeding economy—if it had been passed. In May of last year, Gov. Michelle Lujan Grisham chided state legislators for missing the boat when they had the chance. During a COVID-19 update, she pointed out that the state’s revenue losses resulting from the dip in oil and gas prices could have been offset by taxes gathered from a legal marijuana market.
“The projections [for legal cannabis] are nearly $100 million of recurring revenue into the budget,” said Lujan Grisham. “If we want economic support and economic relief, then we have to use every economic idea. And I want to point out also that the vast majority of New Mexicans favor recreational cannabis.”
In 2019 the governor’s marijuana working group, which was tasked with researching the best way to implement legalization and producing a report for lawmakers, recommended adopting a system that funneled cannabis tax revenue into a number of different social programs that were underfunded or didn’t exist yet.
Revenue would have gone to support the Department of Health and supplement low-income and high-user patients who need help paying for medical cannabis. Funds would also be given to law enforcement agencies to pay for training and equipment that would help ease the transition into the new laws. Programs to reinvest into the community and address public health issues—like DWI prevention, funding for housing, job training and legalization research—would also have been included. Revenue would be used to implement more robust testing and labeling standards for cannabis producers as well.
The group also recommended that revenue be used to address social inequities that have been perpetuated by the Drug War. This would have been done by providing funding to assist low-income entrepreneurs looking for loans to start cannabis businesses and by providing funds to seed community college cannabis industry training programs.
But the bill ultimately flopped last year when lawmakers left it floundering in committee, and none of those programs were implemented. So we were never able to see how these plans would have fared. What we do know is that other states have legalized, and they’ve had spending plans of their own.
In Colorado, where cannabis has been legal for nearly a decade, voters approved distributing over 28 percent of tax revenues from pot to public schools and a general fund used for public infrastructure. The rest is put into a “marijuana tax cash fund” that is spent the following year on health programs related to substance abuse and treatment.
In Washington tax revenue is split between a number of programs and agencies. Most of it is put into a “Basic Health Plan Trust Account” to provide “necessary basic health care services to working persons and others who lack [health] coverage.” The rest is put into a general fund to be employed by the state as it pleases, given to local governing bodies of cities and counties, transfused into the public education system and used to fund cannabis research.
New Mexico is still facing a crisis. With record unemployment numbers and the loss of a good portion of the state’s small businesses to pandemic shutdowns, New Mexicans are in terrible need of some financial relief. We need money. Opening the way for a robust recreational cannabis market can only help in these dire times. Hopefully we won’t make the same mistake we did last year—and all the other times.
