Cannabis, Yes

Cannabis reformers have nearly completed their high-speed pursuit of adult use legalization in New Mexico.

Fewer than 36 hours after the start of the special legislative session in which Democrats hold the majority in both chambers, a pair of bills is heading to the governor's desk. In a series of historic votes, a measure that would legalize and tax marijuana for adult use, called the Cannabis Regulation Act (House Bill 2), and one that orders the expungement of criminal records for cannabis possession (Senate Bill 2) earned approval Wednesday night.

In lay terms: It's almost over in plenty of time for Good Friday.

The full Senate passed a measure in the morning to clear the way for a piece of the legalization push prized by longtime advocates and sponsors: wiping out past convictions and righting some of the wrongs of the drug war that fell disproportionately on non-white and poor communities.

Hours later, the House passed SB 2 as well, sending a law for automatic expungement of such charges and convictions to Gov. Michelle Lujan Grisham.

"This will not be the end of the journey for cannabis regulation in New Mexico, it will be the beginning," said Sen. Katy Duhigg, a rookie Democrat from Albuquerque whose steady, ubiquitous hand did much of the pushing for legalization during the regular, 60-day session that ended March 20 and the special session that saw New Mexico become the 16th state to end prohibition when it gaveled to a close. "I know that there are going to be a lot of additional improvements going forward, but what we have now…is a solid framework to be able to make a change that has been a long time coming."

When it came to HB 2: First, the House voted in the early afternoon to adopt the measure—substantively similar to the bill it passed in the regular session. Then, the Senate's "Committee of the Whole" met Wednesday afternoon to discuss it along with an alternative measure from Minority Floor Leader Cliff Pirtle, a Roswell Republican. The "committee" vote of 23-19 led to an official floor vote of 22-15 at 8:30 pm, largely along party lines with Republicans voting against.

Even in this odd, virtual year of legislating, some high-profile senators were conspicuously absent from the vote.

The House concurred shortly thereafter.

With Gov. Lujan Grisham pushing for adoption of some kind of legalization and her cabinet working closely with sponsors of HB 2, Sen. Joseph Cervantes, D-Mesilla, summarized criticisms of the process and the proverbial writing on the wall early Wednesday evening.

"I don't have any illusion that we are here tonight to improve this bill anymore or that we are here to debate this bill and to rewrite this bill. We are called into special session the week of Easter, just like we were called into special session the last time the week of Thanksgiving, for a very clear reason, which is to get out of here quickly and do as little as possible to a predetermined result," he said.

Rep. Javier Martinez, an Albuquerque Democrat and one of the top-line sponsor's of this year's legalization bill who withstood a staggering number of hours of questioning during the past two-plus months, left the special session with a different attitude.

"Now we have an opportunity as the rest of the country moves in this direction to establish a framework for utilization, taxation and regulation," he said. "We can either do it now and do it right in 179 very complicated pages, or we can wait until the federal government decides to legalize it and then we have to play catch up."

The House floor vote of 38-32 came after Republicans took several hours of the debate to suggest the measure would increase crime, homelessness, student truancy and drug use. Then, seven Democrats and the chamber's lone independent joined them in voting against it.

Rep. William "Bill" Rehm, R-Albuquerque, for example, introduced an amendment "aimed at the drug cartels" attempting to levy a civil fine of $100 per ounce of cannabis if people couldn't prove it came from a licensed grower or distributor. (The Cannabis Regulation Act also allows for people to grow the plant at home.)

Rehm's gambit failed.

Two Republican-introduced amendments did make it into the bill, however—one that would add a municipal police chief to the cannabis advisory committee created by the legislation and another that would require studies of how legalized cannabis impacts the state's general fund and expenses, the medical cannabis program, law enforcement and jobs and tourism.

A fiscal impact report issued by the Legislative Finance Committee calls on lawmakers to consider the long-range math.

Elimination of the medical gross receipts tax for patients who continue to access cannabis through that program will mean a negative impact of an estimated $9.7 million to the general fund and $6 million to local GRT collections across the state.

Meanwhile, "setting up" the Cannabis Control Division to oversee adult use regulations will require at least $7.63 million in recurring revenue, the report says.

How much new tax revenue would balance those losses remains a moving target. The most recent report says fiscal year 2022 would garner about $15.5 million in combined excise and and gross receipts revenue, growing to about $68 million in fiscal year 2024 for local and state governments. The current version of the bill would levy an initial 12% excise tax on top of local GRT with an escalation of the excise tax up to 18% by 2030, but it does not earmark cash for specific purposes. That task would be left to future sessions.

Several machinations have ensued regarding how—and whether—New Mexico should regulate production. While the state's Medical Cannabis Program limits production based on the number of plants allowed in various stages, the new act would consider the market demand based on average sales in other states paired with New Mexico's population and leaves room to set production floors based on calculations from square footage or other means. That language sunsets Dec. 31, 2025.

"A lot of eyes are watching how this number gets set," said Sen. Jacob Candelaria, D-Albuquerque, who in his professional life represents cannabis producer Ultra Health in a court case against the health department's plant counts. Candelaria has publicly said he's a medical cannabis patient. He waved a vape pen in the Senate chamber during debate and noted it contained 1 gram of indica cannabis "that will be vaped later by me; a lot of it—maybe all of it."

Backers of production limits say examples of supply outweighing demand have cropped up in places like Oregon. Others say production regulations are needed to ensure there's adequate supply of the medical program as adult use expands.

The Cannabis Regulation Act will create a massive new industry in the state that is sure to make some folks rich and others richer.

That notion found its way into debate on Wednesday, with some senators raising the specter of dirty politics should lawmakers wade into the burgeoning new market. To do so, they reminded colleagues of the "embarrassing" saga of disgraced former Sen. Phil Griego, who served time in prison for his role in crafting a real-estate deal of state property and benefitting from the sale as a broker.

Using Griego as the cautionary tale, Sen. Mark Moores, R-Albuquerque, asked bill sponsors whether they had a financial interest in the cannabis industry. None did, but Sen. Katy Duhigg, D-Albuquerque, shot back at Moores, saying she looked forward to him asking the same question Pirtle on his competing legalization proposal.

Moores did not.

But an amendment was tacked onto the bill that bars current legislators from operating cannabis businesses through 2026.

The Cannabis Regulation Act would allow individuals over the age of 21 to purchase 2 ounces of cannabis, 16 grams of cannabis extract and 800 milligrams of edible cannabis at one time and would prohibit possession of more than that amount outside of the home. Sales will begin no later than April 1, 2022.

The bill would prohibit public use and establish cannabis consumption areas in designated, permitted areas to allow a safe space for visitors and others who can't partake at home. The American Lung Association and others have advocated against the latter provision, arguing that indoor smoking creates a hazard for workers.

The Senate "committee of the whole" also heard a presentation from Pirtle on Senate Bill 3. Pirtle says his proposal was targeted to eliminate the illicit market and to "protect public safety," as well as one that treats cannabis like an agricultural product. Senators voted against the idea. Later, Pirtle said the bill that passed was "a horrible piece of legislation" and lamented the "death of the Legislature."

On a separate track, SB 2, the measure to expunge criminal records for cannabis possession convictions and charges, sailed through the House Judiciary Committee Wednesday afternoon and to a floor session, where the House passed by a 41-28 vote.

After more than a decade of efforts to allow people to petition a court for expungement of certain charges—often spearheaded by former Senate Majority Leader Michael Sanchez, a Belen Democrat—lawmakers in 2019 passed just such a measure, and Lujan Grisham signed it.

Sanchez's long fight drew some shoutouts during legislative debate this year, as cannabis legalization and expungement advocates sought to go a step further than the 2019 law and create an avenue for automatic wiping of marijuana crimes that will now be considered legal.

Here's how it would work: The state Department of Public Safety scans its databases to identify people who are eligible for expungement under SB 2. From there, the courts are responsible for ensuring past cannabis convictions are walled off from public view—thereby eliminating for those whose names are attached barriers to housing, student loans, employment and more.

It's not clear how enthusiastic DPS will be about the substantial work ahead. The department did not weigh in when asked by bill sponsors, Sen. Duhigg told lawmakers during debate.

For the record, SFR directs you to the news in the final vote tally in the Senate on HB 2, the taxation and legalization bill: Joseph Cervantes, the Las Vegas Democrat and chair of the powerful Senate Judiciary Committee, did not cast an audible vote; neither did George Muñoz of Gallup, the Democratic chair of Senate Finance. Democrats Roberto Gonazales and Shannon Pinto voted against the measure. So did the following Republican senators: Gregory Baca, William Bert, Crystal Diamond, David Gallegos, Ron Griggs, Stuart Ingle, Gay Kernan, Mark Moores, Steven Nevile, Cliff Pirtle, Joshua Sanchez and Pat Woods.

Lujan Grisham issued a statement shortly after the final vote which reads in part:

"This special session was a success…Change never comes easily and rarely does it occur as quickly as we might like. But with this major step forward, we are signaling more clearly than ever before that we are ready, as a state, to truly break new ground."

Katherine Lewin contributed reporting.

Editor’s note: An earlier version of this story incorrectly identified the political party for Roberto Gonzales. That’s been corrected.