State agency to release rules on cannabis
Final guidelines for producers include increased plant cap amounts to address anticipated supply shortage
After several months of changes, edits and tweaks, the state agency tasked with creating guidelines for a legal cannabis industry in the state released its final rules for producers.
There is very little difference in the final guidelines and the most recent set of proposed rules the agency issued in mid-July. That’s when the Cannabis Control Division, responding to concerns about a possible shortage of the product, increased its plant cap amounts from 4,500 per producer to as many as 10,000.
The division, which is under the state Regulation and Licensing Department, upped the plant count after fielding complaints and concerns there would a shortage once retailers are given the green light to start sales early next year.
Still, some amendments to the rules may be necessary, said Linda Trujillo, superintendent of the Regulation and Licensing Department. She added that while she is “really comfortable” with the rules released Tuesday, more needs to be done to help microbusinesses succeed in the new industry.
Toward that end, she said the Cannabis Regulation Act needs to be changed to allow those entities to sell their product to other microbusinesses and retailers — something the current law does not allow.
“If you are going to invest $250,000 to $500,000 in equipment to manufacture cannabis, you probably from a business perspective are going to need to manufacture more than just what you grow for your own business,” Trujillo said.
Lawmakers would have to approve any amended rules and regulations during the next legislative session, scheduled to begin in
mid-January.
Most of the guidelines remain as they were in July. Large-scale producers will still pay a $2,500 annual fee to operate, while microbusinesses would pay $500 or $1,000 per year, depending on their plant count.
In addition, recreational cannabis producers will pay an annual $10 per-plant fee, while medical cannabis producers will pay $5 per plant. Potential producers must still ensure they have water rights, property on which to cultivate plants and security measures — including digi
tal video surveillance equipment — in place before they apply for a producer’s license.
Some critics have said these prerequisites are likely to turn away applicants who will have to invest considerably in a business that may not even gain approval.
Another issue both critics and advocates of legalizing recreational cannabis have raised
is ensuring that communities hit hardest by drug use and drug laws get a chance to take part in the fledging industry.
The rules include a social equity mandate that sets a goal of ensuring at least 50 percent of all new applicants represent those communities.
Ben Lewinger, executive director of the New Mexico Chamber of Commerce, said the rules “lay a really strong foundation for production. I think we’re off to a really strong start.”
The Cannabis Control Division
will start accepting license applications through its streamlined online system sometime this week. The CCD has 90 days to approve or deny an application once a completed application is received.
It’s unclear at this point how many new potential producers will apply.
Trujillo said data from some other states indicates the first round of applicants adds up to about half the number of existing cannabis producers.
Medical cannabis has long been legal in New Mexico, and
there are more than 30 producers providing medical cannabis in the state.
Lewinger said he could envision 50 to 150 applicants within a month. Trujillo said her agency will move swiftly to get applicants approved — especially since the state expects to begin authorizing retailers to sell cannabis by April 2022.
Rules for cannabis retailers, manufacturers, couriers and lab testing sites have not yet been developed but are required to be finalized by the end of the year.