On April 12, 2021, New Mexico Governor Michelle Lujan Grisham, signed House Bill 2, the Cannabis Regulation Act (the “Act”), which legalizes recreational cannabis in the state.
In addition to legalizing recreational cannabis, the Act sets out to expunge the marijuana-related criminal records of individuals previously convicted of marijuana possession offenses. Under the law, people over 21 will be permitted to possess up to two ounces of cannabis, and grow up to six plants in their homes, with a maximum of 12 per household. Sales are targeted to begin on or about April 1, 2022. Sales will be taxed at 12%, eventually rising to 18%, plus gross receipts taxes.
The Act creates a Cannabis Control Division (“CCD”), which will administer both the Act and the licensing provisions of the Lynn and Erin Compassionate Use Act (New Mexico’s law governing medical cannabis, which has been legal in New Mexico since 2007). The CCD will have until January 1, 2022 to promulgate rules consistent with industry standards including rules regarding: qualifications and procedures for licensure; limits to consumer purchases and possession; advertising and marketing; and promotion of diversity among license applicants, holders, and cannabis industry employees.
Once the Act becomes effective, the New Mexico Department of Health will no longer administer the medical cannabis program. Responsibility for that program will fall to the CCD.
A Cannabis Regulatory Advisory Committee (the “CRAC”) will be formed by September 1, 2021 and will be responsible for advising the CCD on the development of rules pursuant to the Act, including best practices and the promotion of economic and cultural diversity in licensing and employment opportunities. Members of the CRAC will not be permitted to hold any ownership interest or investment in a licensee.
The Act also calls for the creation of a Public Health and Safety Advisory Committee (the “PHSAC”) by September 1, 2021. The PHSAC will be comprised of professionals with expertise related to cannabis products through work, training, or research in public health, epidemiology, medicine, medical toxicology, poison control, road safety, occupational safety, environmental safety, and emergency medicine. The PHSAC will be charged with the preparation of an annual report, starting in 2024, regarding the health effects of legalized adult-use of cannabis.
Highlights of the Act include:
Alongside the Act, the New Mexico state Senate passed a companion bill, Senate Bill 2 (“SB2”) that will wipe certain marijuana convictions from public records. SB2 includes the following highlights:
The CCD has a website containing further details about the Act.