Lawmakers on a state House committee Monday advanced a cannabis legalization bill that would put no cap on commercial production and would send some of the tax revenue generated by the measure to communities hit hardest by drug addiction and drug-related crimes.
Those provisions set House Bill 12 apart from a competing measure, House Bill 17. The House Health and Human Services Committee voted in favor of HB 12 after more than six hours of debate on the two measures in two separate sessions.
Advocates for both bills said initial estimates suggest gross receipts tax revenue on recreational cannabis could bring between $50 million and $100 million per year. HB 12 sets the rate at 13 percent and allows local governments to add their own gross receipts tax. “Cannabis is not new to our communities, it is not new to New Mexico,” said state Rep. Andrea Romero of Santa Fe, one of three House Democrats sponsoring HB 12.
She and other advocates for legalizing recreational cannabis for adults over 21 said the effort would help end illicit markets and provide much-needed revenue for the state.
Both bills would create an oversight division to develop licensing criteria and procedures for growers and sellers.
Lawmakers are cautiously moving forward with a cannabis legalization initiative as similar efforts are growing nationwide, even as it remains a crime under federal law to possess or use marijuana. Arizona residents recently voted to approve marijuana legalization in their state.
Gov. Michelle Lujan Grisham, a Democrat, has voiced her support for cannabis legalization and backed an unsuccessful effort in 2020. Given most Democrats in the Legislature — who hold a wide majority in the House and Senate — support the effort, it’s likely to become law this year.
Under HB 12, the law would take effect in January 2022, which is when the state could begin issuing annual licenses for commercial production and sales. The law would allow people 21 and over to use or grow their own cannabis in the state, though they could not be in possession of more than 2 ounces of cannabis or 16 grams of a cannabis extract outside their homes.
People would not be able to smoke cannabis in public — other than in designated areas, such as a cannabis production or distribution facility. The bill requires public schools to come up with a plan to educate middle and high school students on the dangers of using cannabis.
It also provides employer protections, allowing companies to set their own rules regarding workers’ use of cannabis, including “adverse” actions against employees who use or possess cannabis in the workplace.
The biggest difference between the two House proposals is how much cannabis could be produced in the state. HB 12 has no production cap in place. Advocates say that is necessary to prevent a black market from growing. “Undersupply can fuel the illicit market,” said Emily Kaltenbach, senior state director of the national nonprofit Drug Policy Alliance, which supports HB 12. “People will go to that market if they can’t find enough supplies.”
But creating an unlimited supply can cause other problems, argued Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, which supports HB 17. That measure would limit the number of cannabis licenses the state could issue.
He told lawmakers that Oregon, which legalized recreational cannabis in 2015, had to pass new laws to limit production after growers produced an overabundant supply.
“Not having any mechanism to conduct production management is, potentially, the most dangerous thing to having a competitive market in this state,” Lewinger said.
Romero said such concerns are “artificial.”
The Health and Human Services Committee voted 7-4 along party lines, with Democrats supporting it, to move HB 12 on to the House Taxation and Revenue Committee for consideration.
Meanwhile, three Senate bills that would legalize recreational cannabis are awaiting an initial hearing in the Senate Tax, Business and Transportation Committee.