Advocates are still celebrating the passing of the Cannabis Regulation Act (CRA) last month, but some medical cannabis and prospective recreational producers are concerned that a lack of detail and direction in the bill could lead to a confusing scramble before the recreational retail marijuana market opens its doors.
The Cannabis Control Division of the New Mexico Regulation and Licensing Department is set to begin processing license applications from recreational cannabis producers, producer microbusinesses and licensed medical cannabis producers looking to take part in the new industry by Sept. 1. That only leaves a few months for the CCD to come up with rules and regulations and implement them before stores can open their doors on Jan. 1; and despite the bill’s length, it left most of these regulations open.
At the moment there is no available draft of the different license applications, no guide on production limitations—there’s not much information available at all to prospective business owners cruising the CCD website other than application fees as outlined in the CRA, a short timeline of legalization’s rollout, a glossary of terms used in the CRA and a link to a generic economic development toolbox.
For the moment, the CCD’s hands are somewhat tied when it comes to policy, though. The law requires that they create a Cannabis Regulation Advisory Committee that will conduct studies and advise the CCD on policy. The division has already received over 100 applications for members to join the committee and the ball appears to be rolling, but the process will take time.
Protecting Medical Cannabis
Some medical cannabis producers have voiced concern about how the new law will affect the state’s Medical Cannabis Program and its patients. Last month a number of producers sent a letter to state health officials requesting that the plant limits that are currently in place be increased to meet a potential spike in demand.
The letter writers were worried that language in the bill that would allow individuals to keep an unlimited amount of cannabis stored at their home would allow patients to purchase more than the limits set in place by the Lynne and Erin Compassionate Use Act—the medical cannabis law.
New Mexico Department of Health Secretary Tracie Collins and NMRLD Superintendent Linda M. Trujillo responded to the letter, stating that medical cannabis patients would not be able to purchase more than their limit until next year. They also clarified that tax exemptions for cannabis patients would only apply to purchases made up to the limits outlined by the medical cannabis law.
But cannabis shortages could be a future issue. The CRA specifies that microbusinesses are limited to 200 mature plants at a time on one property, but production limits for larger operations aren’t specified. For years state medical marijuana producers have been begging the state Department of Health to raise limits, warning that as the number of patients enrolled in the program reaches record highs the state’s supply of medical cannabis won’t be able to meet the demand. Even with provisions in the bill that require recreational cannabis establishments to dedicate a percentage of their crops to medical-only sales, some are worried that any limits set in place could create a shortage crisis.
Officials say they’re aware of the issues and will keep them in mind as they move forward with regulation. “Our priority will always be to ensure the strength and integrity of the medical cannabis program,” wrote Trujillo in an email. “By signing the Cannabis Regulation Act into law, Governor Michelle Lujan Grisham has opened the state to a brand new industry. The act promises new jobs—such as growers, extractors and cannabis educators. The act has opportunities for both small business operations and large producers alike. This is what is exciting, that all New Mexicans will have opportunities.”
Unforeseen Issues With Water Rights
Before 1907, New Mexicans could initiate a water right by diverting water onto their land and putting it to use. Those who wanted to initiate water rights after 1907 had to get a permit from the Office of the State Engineer (OSE). For those with pre-1907 rights, the rights still stand, but if evidence of the right is ever required, then the landowner will need proof that the right is legitimate. Landowners can register their water rights with OSE and obtain a “Declaration of Ownership of Water Rights,” but many have failed to do so, because it hasn’t been an issue so far or because they were unaware that they could. These farmers will be unable to prove their water rights if challenged and will potentially be set back months while they go through the process of registering with the OSE.
Water quality qualifications have some potential producers concerned. While the CRA does not specify regulations regarding the quality of water required in the production of recreational cannabis, the state has manufacturing standards for medical cannabis that require producers use “potable” water in their grow operations. This requirement would shut out farmers who only have irrigation water rights on their land, even though the water is safe for use in plants.
“Javier Martínez [sponsor of the CRA] acts like if you have a piece of ground, and you have some area to grow, then you can just grow. Well according to all the rules it’s not like that,” says Ed Griffin at Zia Health and Wellness. “Some of these people who want to get in to the program—who are low-income or minorities—they don’t have water rights or the money to get into this business. It takes tens of thousands of dollars to get started.”
Whether community fears will materialize remains to be seen, and much will rely on the success of the CCB and the Cannabis Regulation Advisory Committee. Officials have a large burden to carry, but if they do it right, we’ll have one of the best cannabis programs in the nation.