What to Expect
Beginning at midnight on April 1st, 2022, any person in New Mexico over the age of 21 will legally be allowed to buy up to 2 ounces of marijuana from dispensaries across the state. People are also allowed to have six of their own cannabis plants for personal consumption (up to 12 per household). Smoking cannabis in public can get you a $50 fine, and possession of more than the legal limit can earn you just under a year in jail; possession of extreme quantities is still a felony. The product will be taxed at 12% until July 1, 2025. That excise tax increases by one percent each year until it maxes out at 18% on July 01, 2030. Medical marijuana patients aren’t subject to that tax. There are also gross tax receipts from 5.125% to 8.8125% depending on location. A third of the tax revenue will go to the municipality where the product was sold; another third goes to the county where that sale was made. Sales of recreational cannabis are expected to bring in $318 million the first year alone, with an expected $20 million or more in sales tax revenue for New Mexico’s General Fund. That’s expected to surpass $45 million a year after three years or so. The state government says the industry could bring as many as 11,000 new jobs.
Likely Challenges
Before sales even start-up, there have already been questions about whether supply will be able to keep up with demand. “Just like any new product release or a new restaurant opening, there will always be some lines and shortages of some products,” said Kristen Thomson with the Cannabis Control Division. “I cannot imagine a scenario — nor do we anticipate — a store selling completely out, unless they were only supplying one product.”
The War on Drugs
New Mexico’s Cannabis Regulation Act also puts into place a few different social equity policies. Firstly, SB2 provides for automatic expungement of marijuana-related convictions that are no longer considered crimes. That’s already resulted in 155,000 dismissals or expungements. In some cases, prison terms may be shortened. Plus, law enforcement officers can no longer use the supposed smell of marijuana as probable cause to search a vehicle or other private property, which has historically been used to target people of color, particularly Black people, at much higher rates than White people. The law mandates that rules from the industry must include, “procedures that promote and encourage full participation in the cannabis industry governed by the Cannabis Regulation Act by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions, rural communities likely to be impacted by cannabis production and agricultural producers from economically disadvantaged communities.” The New Mexico Finance Authority is giving out a credit line of up to $5 million for micro-businesses in the cannabis industry. The average loan size is about $100,000.
Tribal Communities
In 1831, the Supreme Court of the United States ruled Native Americans are not subject to state law, though they must still answer to the federal government. “The Congress shall have power to ... regulate commerce with foreign nations, and among the several states, and with the Indian tribes,” the ruling states. Because marijuana is an illegal Schedule 1 drug in the eyes of the federal government, that called into question whether tribal communities would be able to participate in the cannabis industry if the state where their land lies legalizes marijuana. In New Mexico, state cannabis regulators have an agreement that allows for “cooperative oversight” of cannabis production and sales. So far, that agreement applies to the Picuris and Pojoaque pueblos, though there are 21 more federally recognized tribes in the state.