New Mexico’s cannabis laws have been lauded as some of the most advanced in the nation, but there’s no such thing as a perfect law. Regulators and prospective marijuana business operators have bumped up against some issues that weren’t properly addressed in the laws as the market takes its first steps. Now legislators are looking to make some changes before adult-use cannabis stores open their doors on April 1.
Last month New Mexico’s Cannabis Control Division (CCD) announced that it was temporarily implementing a plant limit increase for the state’s marijuana producers to address predicted shortages. Producers can now grow twice the number of plants that the Cannabis Regulation Act (CRA) allows.
“The Division has considered demand estimates provided by applicants and licensees in the cannabis industry,” wrote director Kristen Thomson in documents filed with the state’s Commission of Public Records as reported by NM Political Report. “Projected market demand shows that the demand for regulated cannabis will increase year-to-year as more cannabis consumers move from the illicit market to the regulated market. The supply of medical cannabis will become increasingly threatened without an adequate supply of plants.”
The only problem is that it left out microbusinesses—cannabis companies that cultivate and sell 200 plants or less at a time. Considering lawmakers’ stated intentions to support small businesses and level the playing field, the announced rule change seemed to run contrary to the spirit of the law by penalizing microbusinesses and rewarding larger companies.
But the fault appears to lie in the wording of the law and not with the CCD. The plant limits for microproducers were set at 200 by the CRA and regulators can’t override the law. “In the spirit of promoting social equity and ensuring that our micro producers have the greatest opportunities that they can have, the CCD wants to see that definition changed,” said division spokesperson Heather Brewer.
The agency may get its way. Last month state Sen. Linda Lopez and Rep. Andrea Romero introduced Senate Bill 100. If passed, the bill would update some CRA definitions and tweak a few rules—including increasing the production limit for microbusinesses from 200 plants to 1,000.
“It doesn’t mean that every micro producer is going to want to grow 1,000 plants,” said Brewer. It does mean that the temporary doubling of plant limits would no longer give larger and out-of-state companies a market edge over smaller producers.
The bill proposes a number of other welcome changes to the CRA. One such change is a new provision that would allow companies that are already operating in the medical cannabis market to employ workers as young as 18 years old. This would come as a relief to many employees who were hired under the Lynn and Erin Compassionate Use Act—the state’s medical cannabis law—which allows companies to hire employees who are at least 18 years old. Those workers would have to be let go since the CRA requires employees be 21 years old or older.
Another great relief could be coming for entrepreneurs who wish to participate in the adult-use cannabis market but have already been issued a liquor license. Under the CRA, “A licensee may
conduct any lawful activity or any combination of lawful activities at a licensed premises; provided that the licensee is not a licensee pursuant to the Liquor Control Act.”
Presumably lawmakers meant to bar companies from opening establishments that sell both cannabis and liquor on the same premises. The language actually forbids all liquor licensees from conducting lawful activity at a cannabis store, possibly including shopping as a consumer. SB 100 would altogether remove the language seen in this line that references the Liquor Control Act. It would also strike language that bans cannabis business licensees from conducting sales of alcoholic beverages and replace it to explicitly forbid licensees to “co-locate any cannabis- and alcohol-related licensed activities.”
If signed into law, the changes would allow an enterprising entrepreneur to open up a cannabis dispensary and a bar that serves alcohol as long as they are on separate premises.
The bill also proposes requiring cannabis license applicants to undergo a thorough state and federal criminal background check and submit their fingerprints to the Department of Public Safety (DPS) for coordination with the FBI. By linking up with the federal law enforcement agency, the CCD will be able to access applicants’ criminal history in New Mexico and other states as well. The DPS would be required to compile and provide the data to the CCD.
If signed into law, SB 100 should fix many of the unexpected issues that have popped up in recent months. The governor has reportedly shown support for the bill and none of the changes appear to conflict with the spirit of the original law. It also seems like the industry only stands to gain from the changes and it’s unclear if any parties involved would have anything to lose should they be implemented.
If the law does pass, micro producers will definitely be in a better spot, but they won’t be able to make up for the time they will have lost. Every day that goes by is another day that bigger companies are able to put plants in the ground while small businesses can only stand by and watch. This has already been going on since late January, and it might be tough to calculate exactly how much potential profits are being lost by microbusinesses during this time. While it certainly appears to be the result of a simple blind spot during the bill’s drafting, it shouldn’t be overlooked.
The current New Mexico 30-day legislative session ends at noon on Feb. 17.
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