New Mexico Prepares for Legalization

On April 12, 2021, Gov. Michelle Lujan Grisham signed New Mexico’s HB 2, the Cannabis Regulation Act, beginning the process of legalizing and regulating cannabis consumption and sales for adults 21 years of age and older. On August 24, 2021, the New Mexico Regulation and Licensing Department stated that they finalized the regulations for cannabis producers and would be accepting applications for licenses in the following week. 

This is only the first publicized set of rules, with more specifics regarding retailers and testing facilities to come in the near future. 

“Producer Rules Effective Today! The rules that take effect today cover the licensing of cannabis producers—the people and businesses that grow and harvest cannabis,” the announcement stated. “The rules include plant count limits, which are required by the Cannabis Regulation Act, as well as licensing fees. The Cannabis Control Division will start accepting license applications through its streamlined online system later this week. The CCD has 90 days to approve or deny an application once a completed application is received.”

The regulations for producers are available to view on the New Mexico Commission of Public Records website and the New Mexico Regulation and Licensing Department’s Facebook page, but here is a quick breakdown of what HB2, the Cannabis Regulation Act entails.

State Cannabis Licensing 

  • A Cannabis Control Division will be created within the Regulation and Licensing Department to license and regulate cannabis businesses.
  • The Division will license 10 types of cannabis businesses: couriers, producers (growers), manufacturers, retailers, microbusinesses, cannabis consumption areas, vertically integrated establishments, and integrated microbusinesses.
    • Producer microbusinesses may grow no more than 200 mature plants at a time.
    • Integrated microbusinesses may cultivate cannabis, produce infused products, and/or operate a single retail location.
  • Any qualified applicant can apply for a license. Within 90 days of deeming an application complete, the Division will grant or deny the license.
    • Applicants may not have prior convictions “substantially related to the qualifications, functions or duties.” This includes felony convictions involving fraud, embezzlement, or deceit, or involving a minor in drug sales. It does not include cannabis convictions. 
  • Multiple licensees may operate at one premise, and licensees may operate many premises.

 

Adult-Use Possession and Cultivation Limits

Adults who are 21 and older will be allowed to:

  • possess, purchase, and give other adults up to two ounces of marijuana, up to 16 grams of concentrated marijuana, and 800 milligrams of edible cannabis;
  • cultivate up to six mature and six immature cannabis plants, with a maximum of 12 mature plants per household;
  • create cannabis-infused foods at home or perform extracts that do not involve volatile solvents;
  • possess greater amounts of cannabis, if it is stored in a locked space at the person’s residence that is not visible from public spaces; and
  • possess, manufacture, and give away paraphernalia.

 

Cannabis Business Requirements and Regulations

  • The Cannabis Control Division will develop rules — which must be consistent with industry standards — on advertising, health and safety, testing, labeling and packaging, regarding additives (including banning nicotine), quality control, and environmental protections.
    • Packaging cannot be designed to appeal to minors and must be child-resistant.
    • Warnings must be included on possible adverse events, along with the number for New Mexico’s poison control.
    • Advertising is banned on TV, radio, and mass transit, and other than to adults who opt in or who subscribe to subscription-based media.
    • Advertising cannot use predatory marketing targeting minors, use cartoon characters, or mimic other brands.
    • The Division will develop rules for cannabis training and education programs.
  • The Division will provide a discount for retailers agreeing to accept microbusinesses’ products on consignment.
  • Cannabis business employees must be 21 or older.
  • By September 1, 2021, and once per year until 2025, the Division will limit the number of plants a producer may produce. “The rule shall set the number of allowed cannabis plants per licensee to meet an average national market demand for cannabis products in states where adult and medical cannabis are authorized during the preceding year using a consumer base of no less than twenty percent of the adult population of New Mexico.”
    • Producers could increase their number of plants by 500 at the time of renewal and one other time each year.
  • Cannabis servers would be required to get permits and take education courses.
  • The Division will issue rules for training for cannabis servers’ permits, which will include training on the effects cannabis products may have on a person, state laws on cannabis, how to spot a fake ID, cannabis harm reduction, and methods to recognize and intervene with problem cannabis users.
  • If a cannabis business breaks the law, the Division may suspend or revoke licenses, issue a correction plan or intermediary sanctions, or issue fines of no more than $10,000 per violation.
  • The Division “may suspend a license for repeated violations of the same, serious and substantial rule promulgated pursuant to the Cannabis Regulation Act pertaining to public health and safety.” 

 

More To Come

The CCD is prepared to support licensees and is aimed at maximizing the economic opportunities that adult-use cannabis sales will produce. HB2 addresses numerous areas of cannabis regulation such as public health, medical provisions, taxation and fees, legal protections, law enforcement, and much more. Check back periodically for more information regarding the newest cannabis-related news.