Advocacy for full legalization of marijuana in New Mexico can be traced to the late 1990s, when then-Governor Gary Johnson became the highest-ranking elected official in the country to endorse it. However, it wasn’t until April 12, 2021, when Governor Michelle Lujan Grisham signed into law the Cannabis Regulation Act, that cannabis become legal in the state.
The Cannabis Regulation Act made possession legal in New Mexico as of June 29, 2021, and allows adults to have up to six flowering plants and six non-flowering plants at one time. There is no limit as to the amount of marijuana flower a person may possess in their home at one time, but they may only possess up to two ounces outside their home. In addition, the Cannabis Regulation Act set April 1, 2022, as the first day adult-use sales will be allowed and placed significant restrictions on local and county governments’ ability to prevent cannabis sale and production in their jurisdictions.
The law established several different types of licenses for the marijuana industry, each with their own set of requirements. It also created the Cannabis Control Division to develop the regulations for each type of license (producer, manufacturer, retailer, testing laboratory, research, courier and consumption area).
Businesses can be vertically integrated and there are no limitations as to the number of licenses that will be issued, as long as the applicant complies with all the requirements set forth in the regulations. The state started accepting applications for producers on August 25, 2021, however, the regulations governing other aspects of the industry are still being formulated. The state has until January 1, 2022, to begin accepting all other license applications.
The law also allows microbusinesses to enter the market without having to comply with some of the more onerous regulations and significantly higher fees placed on larger businesses. While larger licensed producers will be allowed to have up to 8,000 mature plants at one time, microbusinesses may only grow up to 199 mature plants and will only be permitted to have a single location for their operation.
The state expects the market for cannabis in New Mexico to reach $1 billion per year within the next five years. In addition to sales tax, there will be a 12% excise tax in 2022 on all sales of marijuana products. That rate will increase by 1% every year beginning in 2025 until it reaches 18% in 2030.
Christopher K. P. Cardenas ǀ Cardenas Law Firm LLC