Keeping up with the cannabis news over the last month has been no easy task. In a whirlwind special session that lasted fewer than 36 hours, the Legislature adopted a cannabis reform package. The governor signed the bills last week, and New Mexico became the 16th state to finalize legalization of adult-use cannabis. Now, there’s a ton of work to make the regulatory environment take off, change perspectives in law enforcement and so much more. Lucky for you, SFR rolls the very latest into one neat package.
Are you a patient?
We know your inbox is blowing up with 4/20 right now, so just think of what it will be like next year when recreational marijuana sales are jumping off in the Land of Enchantment. Scroll down for more regional and national news, and thanks for reading.
Gov. Signs Cannabis Law — Adult-use law sales that start next April and expungement process mark New Mexico milestone
Here’s Cannabis — New Mexico breaks through prohibition—now the work starts
Smell of Reform — Cannabis reform advocates are deliberate about the wording of proposed legislation
Local Impact — Analysts’ estimates for legal cannabis tax revenue range, depending on out-of-state shoppers
Walling Off — Big lift ahead for officials required to expunge thousands of old cannabis convictions under newly passed law
The state is looking for people to serve on the new Cannabis Regulatory Advisory Board to help craft rules and set policy for adult-use cannabis. Lawmakers called for the board to include people from: a cannabis policy advocacy organization; a labor organization; a state or local agency; an Indian nation, tribe, or pueblo. It’s also seeking those with expertise in public health, regulating commercial activity for adult-use intoxicating substance, cannabis laboratory science, small business development, water resources and other relevant areas. If you fit the bill, apply before May 3.
NewMexicann throws in the towel
As of April 11, New MexiCann has closed its doors in Santa Fe, Las Vegas, Espanola and Taos. “We are heartbroken to announce due to unfortunate events we are closing all of our locations,” read a text message to customers. Five days the later, the state environment department fined the dispensary $142,000 for worker safety violations. Its owner Carlos Gonzales faces two felony arson charges in a fire that seriously injured two workers, the second such fire in the dispensary’s history. Meanwhile, the Department of Health held a hearing to revoke its license as a producer. Health Department spokesman David Morgan told The Santa Fe New Mexican on Friday that a hearing officer submitted a report that day to the state health secretary, recommending that action.
Supply side economics
Five medical cannabis producers say they have big concerns that the recently approved legalization could lead to a supply shortage for medical marijuana patients starting this summer. Ultra Health, Sacred Garden, G&G Genetics, Budding Hope and Kure sent a letter to state officials laying out that the Cannabis Regulation Act allows enrolled patients to purchase much greater quantities of cannabis than at present, but at the same time, limits on the amount producers may grow remain in place.
“Producers have experienced shortages for years, and those shortages have increased over the past year. The patient population has ballooned to more than 112,000. The ongoing pandemic has increased the severity of patients’ medical conditions. Several producers have had their production stymied by DOH’s delay in processing license amendments and inspections. One producer is out of the market entirely due to a license revocation. The start of the outdoor growing season has been affected by severe weather. All of these factors mean that stores throughout New Mexico are running out of product, even as producers continue to cooperate by making wholesale transactions. The current shortages are only a sneak peek of the extreme shortages that are likely to develop after June 29,” it read in part.
Medical cannabis providers are also looking to expand in New Mexico, including multi-state Vireo, which markets as Red Barn Growers in Santa Fe and Gallup. The operation has completed expansion of a new cultivation site near Gallup comprised of six year-round hoop houses that make up about 12,600 square feet. Growing would begin there pending DOH approval, and will “support increased demand at its existing dispensaries in Santa Fe and Gallup, as well as the two new locations in Albuquerque and Las Cruces,” a news release from the company said this month. The company works in at least seven states, according to its website.
Around the Nation
Tax and tax some more
Speculation about oversupply in Oregon seeing a repeat in New Mexico came up more than once in debates here, but another problem cropping up in the industry is getting a warning cry from Portland. Cannabis economist Beau Whitney has been compiling an analysis of impending federal corporate tax hikes coupled with a plan in which the Oregon Legislature could refer to voters a proposal to allow cities and counties to increase the local tax on cannabis products up from 3% to 10%, in addition to the state’s 17% cannabis tax. Whitney says the one-two punch could be a recipe for disaster, and one the cannabis industry—especially smaller players—likely can’t handle.
For comparison, New Mexico’s taxes aren’t that far from the Oregon proposal. The new law levies an initial 12% excise tax on top of local GRT (currently 8.4375% in the Santa Fe city limits) with an escalation of the excise tax up to 18% by 2030—meaning that the local rate would be 20.5% the first year and grow to 26.5%.
States fall like dominoes
As New Mexico lawmakers met in special session to talk about cannabis again, New York went ahead and passed its recreational bill, with Gov. Andrew Cuomo signing it into law on March 31. Then, Virginia broke through as the first state in the South to vote to legalize marijuana. At 2 pm, Tuesday, April 20, the Drug Policy Alliance hosts a webinar about how this leads the way for other states in the South to follow suit and pursue marijuana justice. While Virginia moved forward on reform, meanwhile, in Kentucky lawmakers this month again punted on approving medical cannabis.
Not time yet to bank on it
A federal law that would enable banks to provide services for the cannabis industry could see another vote on the House floor as early as today. Versions of the SAFE Banking Act—”creating a safe harbor from criminal prosecution, liability and asset forfeiture for financial institutions, and their directors, officers and employees, who choose to provide financial services to legitimate, state-sanctioned cannabis businesses,” according to Lexology—have been introduced in both houses with bi-partisan sponsorship. While similar bills have passed the House before, they’ve stalled in the Senate. What’s different now is Democratic control of the Senate.