New Mexico is the latest state to legalize recreational marijuana. The New Mexico governor recently signed legislation that will officially make cannabis legal for adult use in the state. What could this mean for the New Mexico economy, and for savvy cannabis operators who are looking to expand their reach into new markets? Keep reading this blog to learn more.
New Mexico Governor Signs Law to Legalize Adult-Use Cannabis
New Mexico is set to become the seventh state since the November 2020 election to legalize adult-use cannabis. The New Mexico state senate passed a cannabis legalization bill earlier this year, shortly after New Mexico Gov. Michelle Lujan Grisham called for a special legislative session to consider, among other things, the legalization of marijuana for recreational use. With previous opponents of legalization no longer in the state senate after the November election, the bill was quickly approved by legislators. Despite opposition from most Republican lawmakers in the state senate, some GOP senators grudgingly supported the measure as a way to regulate marijuana and ensure public health and safety.
Although Lujan Grisham signed the recreational marijuana bill into law on April 12, the possession and use of cannabis for recreational purposes won’t technically be legal for a few more months because state officials still need to work out some of the details. This includes evaluating and approving licenses for cannabis product testing labs, as well as establishing rules on product safety, qualifications for applying for a cannabis operator license, and standards for training employees who work as “cannabis servers” at dispensaries.
What Is New Mexico’s Recreational Cannabis Law?
Linda Trujillo, the superintendent of the New Mexico Regulation & Licensing Department, said that adults over the age of 21 can legally grow small quantities of marijuana – six (6) plants per person or 12 per household – at their residences beginning on June 29, 2021. Additionally, individuals will be allowed to possess up to two (2) ounces of marijuana outside their residences.
Some other important aspects of the new law include the following:
- Cities and towns can’t ban cannabis businesses, but they can place limits on location and hours of operation.
- Marijuana cultivation quantities will be capped for the first few years.
- Marijuana must come in child-proof packages.
- State lawmakers will have the ability to work with Native American tribal governments on separate cannabis deals.
- Employers can still fire employees who use marijuana.
When Can Recreational Cannabis Be Sold in New Mexico?
Legal sales of recreational cannabis won’t happen until next year because cannabis operators will need to apply for state licenses. The legal sale of adult-use cannabis in state-licensed dispensaries is scheduled to start by April 1, 2022.
Although cannabis operators won’t be able to sell adult-use cannabis until 2022, they will be allowed to start cultivating marijuana several months in advance in order to meet what is expected to be significant demand for their products. There is already a robust market for medical cannabis in New Mexico: more than 112,000 patients, or roughly 5% of the state’s population, are currently enrolled in New Mexico’s medical marijuana program.
The Creation of a Cannabis Economy in New Mexico
Proponents of cannabis legalization in New Mexico have long argued that the creation of a legal cannabis economy within the state will help to generate jobs for residents, as well as revenues for state and local governments. New Mexico will impose a 12% tax on legal cannabis sales at the outset, with that tax rate steadily increasing to 18% as more time goes by. (These new taxes will not apply to medical marijuana sales.) The expectation is that New Mexico’s recreational cannabis market will thrive and provide the state with much-needed tax revenues in the future.
New Mexico Marijuana Reform Efforts and Social Justice
In addition to providing a huge boost to the New Mexico economy, the legalization of marijuana for recreational use could also change the state’s legal landscape. In fact, marijuana reform is something that NM Governor Lujan Grisham has long supported. After signing the cannabis law, she addressed the disproportionate arrests and convictions for marijuana possession among racial and ethnic minorities. According to Lujan Grisham, marijuana legalization will help to “bring about social justice in ways in which we have been talking about and advocating for, for decades.”
One specific way in which the new law could impact social justice is by leading to the release of more than 100 people who are currently incarcerated for low-level marijuana possession or distribution charges. Additionally, the new cannabis law includes a provision that will allow for thousands of New Mexico residents to automatically expunge past marijuana possession convictions from their records. Beyond that, law enforcement will no longer be able to use the odor of marijuana as justification for police searches of vehicles, residences, or other private property.
Contact Scythian Cannabis Real Estate Today
Scythian Real Estate is a privately held cannabis real estate fund that has strong relationships with the top cannabis operators in the United States. Scythian provides capital and other assistance to cannabis companies with dispensaries in states where marijuana is legal for recreational use. If you are a cannabis operator looking to add capital and/or expand your business into a new cannabis market like New Mexico, Scythian Real Estate may be able to help. For additional information, send us an email.
PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.
