This story appears in both The Paper and the Santa Fe New Mexican through a partnership to bring our readers the best in reporting from the legislature.
By Robert Nott The Santa Fe New Mexican
Lawmakers and activists pushing for the legalization of recreational cannabis during last year’s legislative sessions said they likely will have to come back to tighten up the law in the future.
So it should be no surprise that they’re back this year.
But the lone cannabis bill making its way through this year’s 30-day legislative session — Senate Bill 100 — would involve more than just minor technical tweaks, the chair of the Senate Judiciary Committee said Sunday.
It also would allow those opening micro cannabis businesses to increase the number of plants they can grow from 200 to 1,000.
And it would allow existing nonprofit agencies that grow medical cannabis to convert their status to for-profit.
The proposed changes to the Cannabis Regulation Act speak to the complexity and unanswered questions about an industry that, its champions say, will create thousands of jobs and provide a jolt of financial vitality into the state.
“We always hear we have technical fixes from the last session,” Sen. Joseph Cervantes, D-Las Cruces, said during Sunday’s hearing. “Some of these are. Some are substantive changes in our policies.”
Cervantes, chair of the committee, was one of the more critical, or dubious, legislators to question the laws creating the Cannabis Regulation Act last year.
“Less than a year later we’re already changing it,” he said Sunday, which means “we didn’t get it right.”
The new cannabis bill is aimed at clarifying some rules approved last year — like one that says someone who has a commercial liquor license cannot obtain a cannabis production or retail license. Language in SB 100 makes it clear that one person can in fact hold those two licenses but cannot sell alcohol and cannabis at one business site.
But more work needs to be done on determining the rules for the industry, which was heralded as one that would create jobs, pump more money into the state economy and allow everyday New Mexicans a chance to profit from cannabis farming, said Linda Trujillo, superintendent of the state Regulation and Licensing Department.
She said her agency is learning as it unravels all the components to legalizing cannabis, such as production, manufacturing, retail and the economy of it all.
When Cervantes asked Trujillo why her agency was increasing the plant-count cap for micro businesses, she said it has become obvious that those growers could never make a profit with such a limited amount of product.
“It has become very clear the larger businesses have the upper hand,” she said, noting those bigger outfits can grow up to 20,000 plants a year.
She, Cervantes and others in the industry all say that the state’s current 30-plus medical cannabis businesses already have a head start on homegrown micro operators who might still be looking for capital, land and the necessary water rights to get growing.
That was a concern voiced by many last year as lawmakers struggled to put all the difficult-to-fit pieces into a broad legal cannabis platform. Trujillo and other advocates have been proposing measures to help those smaller cannabis businesses get a foothold in the cannabis industry.
In December, Trujillo pushed lawmakers to support a plan to provide up to $250,000 in loans to those entrepreneurs.
Trujillo acknowledged she has been learning a lot on the job since Gov. Michelle Lujan Grisham appointed her department secretary just over a year ago.
“I was not the cannabis czar. I knew very little about cannabis,” she told Cervantes.
Cervantes praised her openness. In politics, he said, “candor and honesty and reputation are the only things of value. I want to thank you because I trust you. You’ve been very candid even when sometimes it’s not easy to do so.”
Republican lawmakers on the committee also expressed concern that allowing the current nonprofit medical cannabis producers to switch to for-profit opens the door for any of those companies to sell the rights to their companies — and hence their rights to licenses.
As such, said Sen. Cliff Pirtle, R-Roswell, said those cannabis licenses could become valuable — much like the state’s liquor licenses, which for decades turned into documents of treasure that could be sold or passed on to other liquor establishments.
Some estimates put those liquor license sales as high as $500,000.
“There is a way to sell that [cannabis] license without actually selling that license,” Pirtle said of the possible transfer or cannabis company rights from one business to another.
Trujillo said that is a challenge the state will have to take up but noted those licenses need to be renewed annually regardless, which will make the task of keeping track of them easier.
New Mexico legalized the production, sale and use of recreational marijuana last year for adults 21 and older. Sales are scheduled to begin April 1.