Cannabis reform in New Mexico stayed alive early Thursday morning as a House-approved proposal to legalize and tax adult use received a do-pass from its last Senate committee stop.
The Senate Judiciary Committee convened just before 8 pm on Wednesday, then took up the cannabis proposals around 9:45 pm after hearing 10 other House bills. The vote to move House Bill 12 took place at 1:24 am.
As amended, HB 12 would impose a 12% excise tax on retail sales; gross receipts taxes from the state, cities and counties would pile on top of that (in Santa Fe it's 8.4375%) for a combined total tax on cannabis of about 20%. It also would create two advisory committees and a new regulatory agency under the purview of the Regulation and Licensing Department with sales beginning March 1, 2022.
Bill co-sponsor Rep. Javier Martinez, D-Albuquerque, noted that he begrudgingly agreed last week to include provisions that would allow for limits on production. The Judiciary Committee tweaked how that process would work, with a new proposal calling on regulators to set plant caps for the first three years after the law is in effect.
Sen. Cliff Pirtle, R-Roswell, made a last-ditch effort Wednesday night to swap the entire text of HB12 with the text of his Senate Bill 288—an approach he said is more "ag-centric" with a lower 6% excise tax to be divided between the city, county and state, with local GRT piled on top for a max rate of about 14%.
Before the committee rejected that plan, Sen. Mimi Stewart, D-Albuquerque, said she felt strongly about HB 12's inclusion of social justice measures as "just a fairness issue." The measure lays out a path for expungement of criminal records for cannabis possession, plus establishes a "microbusiness" entry point and seats on advisory boards for people from communities impacted disproportionately by the drug war. It also allows adults to grow cannabis at home.
"I don't see any justice reform coming from your side of the aisle," she told Pirtle,"…but for the most part the social justice issues come from our side of the aisle and they tend to be discounted by yours. It's too easy to focus on regulating a new crop and not dealing with the social justice issues."
Legislators on the committee voted largely along party lines, with Republicans voting against the do-pass along with Democratic committee chairman Sen. Joseph Cervantes.
Estimates for state tax revenue collected on cannabis sales range from $20 to $63 million in the first year.
Cervantes said he expected several amendments would be introduced on the floor because there were "a great many problems with this bill," including its structure deviating from "conventional statutory drafting."
"I do really think that the bill is not ready," he said, adding after other remarks, "I won't vote for your bill."