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New Mexico lawmakers likely will push to legalize weed, but steps needed to prepare for sales

Hannah Grover
Farmington Daily Times

AZTEC — If New Mexico wants to legalize recreational cannabis and have sales begin next summer, the state needs to begin ramping up production now, Duke Rodriguez, the president and chief executive officer of Ultra Health, told the Revenue Stabilization and Tax Policy Committee during a Sept. 22 meeting.

That means even before legislation can be passed the state will have to increase the amount of cannabis the 34 licensed producers are permitted to grow in preparation for the possible passage of the bill.

The committee heard presentations on models for legalized recreational cannabis during the meeting that can be viewed on nmlegis.gov. Ultra Health operates 23 medical cannabis dispensaries in the state, including one in Farmington.

Rodriguez said it takes a minimum of four months to grow the cannabis and if the state does not soon begin ramping up production it will face shortages should the Legislature choose to legalize recreational cannabis and begin sales next year.

Medical marijuana is pictured at Ultra Health Dispensary in Las Cruces on Friday, Jan. 17, 2020.

Colorado, which boasts a billion-dollar cannabis industry, has one million plants in cultivation, he said. New Mexico currently has 29,000 plants. These plants are used for the medical cannabis sector.

Rodriguez doesn’t anticipate New Mexico will see the revenues that Colorado is experiencing. However, he said the state could support a cannabis market yielding $600 million in annual sales. With a 15% tax and $600 million in sales, New Mexico could see $90 million of new revenue that could go to the general fund.

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Not every state that has legalized recreational cannabis has seen success. Richard Anklam, the president and executive director of the New Mexico Tax Research Institute, held up California as an example of a state that has been unsuccessful and seen a fraction of the anticipated revenues.

“They continue in this regard to be a poster child of how not to act,” he said, explaining that California created a monstrous bureaucracy and made it hard to participate in the market. On top of that, he said that tax rates are too high, and these factors have led to large scale illegal growing of cannabis.

A cannabis industry executive told a legislative panel that if the state does not soon begin ramping up cannabis production it will face shortages should the Legislature choose to legalize recreational use and begin sales next year.

Rodriguez outlined three things needed for a successful recreational cannabis program: enough production to meet demand, allowing people to purchase a generous amount and not implementing too much tax.

He said in Colorado people are allowed to purchase one ounce per person per day. Meanwhile, Oklahoma has not legalized recreational cannabis but has a robust medical market with more than 300,000 card holders. He said Oklahoma allows card holders to produce two ounces of cannabis per person per day.

State Rep. Rod Montoya

As for price, Rodriguez also said the state will have to competitively price the cannabis to prevent people from crossing into neighboring states to purchase cannabis.

Currently the medical cannabis sells for $9 to $9.50 per gram in New Mexico while Colorado sells cannabis for an average price of $3.50 per gram.

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But representatives from San Juan County expressed concerns about legalizing recreational marijuana. Rep. Rod Montoya, R-Farmington, said he believes there are more issues that the state will need to discuss before passing legislation. As an example, Montoya said the state will have to decide if counties or municipalities should be able to opt out of cannabis sales.

“I think there’s more things than just dollars and cents that we’re going to have to be concerned with,” he said.

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James Strickler

Meanwhile, Rep. James Strickler, R-Farmington, expressed concerns about negative impacts, such as impaired driving and underage usage. He said he would like to see a presentation that details the pros and cons of legalization.

“I don’t think we had enough on the side effects of legalizing recreational marijuana,” he said.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.