Last week the official in charge of developing regulations for the state’s adult-use cannabis industry told lawmakers that the state will likely run out of marijuana products within the first week of sales.
N.M. Regulation and Licensing Department (RLD) Superintendent Linda Trujillo spoke before the Economic Development and Policy Committee last week, citing concerns over the amount of product that will be available to consumers when the adult-use marijuana market opens its doors in April at the latest.
“It’s highly likely we will run out of cannabis in the first week, if not the first two weeks,” Trujillo told lawmakers.
Trujillo based her prediction on data from states that have already legalized recreational cannabis sales. According to the superintendent, the state will need to have around 500,000 mature plants processed and ready to sell when the market opens to meet consumer demand. She also pointed out that the failure rate for growing plants could potentially be as high as 18 percent, meaning the number of mature plants needed will be even higher.
Trujillo said the state cannabis industry will likely experience what she called the “Krispy Kreme syndrome.” When Krispy Kreme locations open in a new market, customers reportedly line up for hours to get a taste of the eatery’s famous donuts, creating an initial spike in demand that tapers off with time. Trujillo warned that New Mexico needs to prepare for a similar spike in initial cannabis sales.
The superintendent also spoke about capital concerns for small businesses trying to break into the industry and noted that the state’s law does not allow the RLD to give licensing priority to smaller or local businesses.
“Access to capital is almost not available,” she told lawmakers. “My fear is that individuals who are interested in getting into this industry are going to take measures like cashing out their retirement or taking out second mortgages on their homes or taking out their family life savings.”
The RLD will be holding another public hearing regarding adult-use cannabis regulation rules on Aug. 6.
Municipalities Struggle With Weed Laws
As the deadline looms for municipalities to settle on cannabis zoning and ordinances, more cities are considering restrictive policies.
In Portales the city council is proposing an ordinance that would ban smoking tobacco and marijuana in most public places. According to The Eastern New Mexico News, the ordinance would ban smoking tobacco or cannabis on any property in the city of Portales that is less than 300 feet from a school or daycare or on any city property, including public transportation.
If the ordinance is approved, tobacco and marijuana users would be able to smoke in a private residence, unless the building is used commercially to provide child care, adult care or healthcare. Smoking would also be allowed at retail tobacco or cannabis stores, as long as they are located in a standalone building, and at cigar bars or cannabis consumption areas. Smoking will also be permitted in cannabis production facilities.
State law has given municipalities until Sept. 1 to enact ordinances and zoning regulations that differ from the Cannabis Regulation Act. The law does not allow city leaders to block all cannabis sales in their jurisdiction, but it does give them the ability to create local provisions guiding the operating hours of pot shops, use of tax funds, whether to include consumption areas and other restrictions.
Albuquerque settled on cannabis zoning rules in June, following a heated debate over where cannabis companies would be allowed to open dispensaries in the city. A proposed set of rules that would have forced marijuana operations out of city main streets was ultimately rejected following public outcry.
But Albuquerque was far ahead of the game. New Mexico’s two other largest cities have yet to decide on cannabis zoning. The Las Cruces City Council began discussing marijuana regulations last month, holding an interactive town hall regarding the topic and hearing from local experts. Santa Fe leaders held a meeting last week, allowing residents to give public comments on its zoning regulations. As with many other cities and counties, leaders are proposing increasing the required spacing of dispensaries from schools and daycares and the inclusion of public consumption areas for cannabis users.
State Orders Shop to Stop “Gifting” Pot
A Las Cruces business has reopened after the state Cannabis Control Division (CCD) issued a cease-and-desist order because the shop was “gifting” cannabis to customers.
The July 27 order was given after a July 20 investigation by CCD agents into claims that Speak Easy NM, an “organics company and gift shop,” was giving small amounts of marijuana to customers with their purchases. According to the Albuquerque Journal, the order demanded that the store cease the gifting of cannabis, but did not levy any additional penalties against the store.
According to the new Cannabis Regulation Act, marijuana is not only legal to possess, individuals may also “gift” cannabis to others as long as no money exchanges hands. The CCD said that by gifting marijuana along with purchases, Speak Easy NM was breaking the law.
The company closed its doors following the order, and its attorney Matt Madrid told reporters that it was evaluating its legal options. Last week Madrid announced the store would be reopening in full compliance with the CCD order.
“The practice commonly referred to as ‘gifting’ will not occur on our premises; however, we are still able to assist the community with CBD products and merchandise,” Madrid wrote in a press release.
“The Cannabis Control Division will not tolerate any individuals or businesses who violate the Cannabis Regulation Act or otherwise diminish the integrity of the adult-use cannabis industry in New Mexico,” RLD Deputy Superintendent John Blair said in a release from the CCD. “All New Mexicans should be on notice that violations of the Cannabis Regulation Act will be met with swift, strong action from the state.”