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New Mexico Residents Voice Concern about State Legalization

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New Mexico’s recreational cannabis law officially took effect a few days ago, but not everyone is confident that the law addresses all cannabis business owners’ concerns.

The New Mexico Cannabis Regulation Act went into effect on June 29 with the expectation that legal sales will begin in April 2022. However, some residents are questioning some of the law’s current restrictions. A number of interested parties entered public comments ahead of time to voice these concerns in an internet-based conference that was held on June 29 at 9:00 am, which was held by the state Regulation and Licensing Department.

The Santa Fe New Mexican noted that multiple individuals who are new to the industry expressed apprehension regarding topics such as providing proof for cultivation facilities and  security requirements. “No one is going to invest in hundreds of thousands, if not millions, of dollars into a production facility with the hope of getting a license,” said one participant, Kevin Lutz.

The president and CEO of one of the state’s largest producers, Ultra Health’s Duke Rodriguez, also brought up concerns about lack of product supply once recreational cannabis sales do begin. His company, in partnership with Colorado-based MPG Consulting, released a “cannabis demand report” on June 28 that contains a list of topics to address, and potential solutions to ensure that the state’s industry gets off on the right foot. “The New Mexico Legalization and Cultivation Capacity Analysis prepared by MPG Consulting is the most comprehensive and detailed demand analysis New Mexico has seen to date,” Rodriguez said in a press release. “The report should serve as the blueprint for how to ensure the Legislature’s intent for commercial cannabis activity is carried out: regulations that allow for a robust industry to finally capture the illicit market and create an $800 million industry that provides for 15,000 new jobs and $100 million in recurring tax revenue.” The report predicts that by 2026 the New Mexico cannabis market will reach $787.7 million “if regulations supporting a robust cannabis market are promulgated.”

Due to the state’s drought status, many commenters voiced concern about their fears regarding farmers competing for water use. The National Drought Mitigation Center, updates its website weekly to reflect drought status throughout the state. While 99 percent of the state is considered as D0, or “abnormally dry,” 30.5 percent of the state is considered to be a D4, or “exceptional drought.” Among qualifiers, this label notes that some federal lands are completely closed due to threat of fire risks, there’s no surface water left for agriculture (and farmers are resorting to using private wells), and the Rio Grande and other large rivers have become exceedingly dry. The other rankings, D1-D3, also mention other negative results of the drought. Although there isn’t any mention of cannabis specifically, it provides a concerning visual of how water could impact cannabis growers’ cultivation sites going forward.

According to the state Regulation and Licensing Department, a final draft of the rules for producers will be released on September 1. This is allegedly separate from draft rules for manufacturing, testing and cannabis sales, which will be released sometime in the future.

Governor Lujan Grisham also announced the removal of pandemic restrictions, effective on June 30, now that 62 percent of New Mexicans have received vaccinations (at least 71 percent have received one dose). Just in time for both the holiday weekend, and the state’s new cannabis law, businesses can operate at 100 percent capacity, and all mass gathering restrictions are gone.