New Mexico Approves Cannabis Rules and Prepares for Legalization

New Mexico officials have announced the arrival of cannabis producer rules, and they plan to allow interested producers to begin their applications for licenses sometime this week.

The New Mexico Regulation and Licensing Department announced on Facebook on August 24 that rules regarding cannabis producers have been finalized and are effective today, and that the agency will begin to accept applications sometime this week. 

“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 post read. “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.”

This is the first round of rules released to the public. Eventually, more will follow with details about retailers and testing facilities, among other important topics. These rules will need to be finalized by January 2022.

“We are ready for business,” said New Mexico Regulation and Licensing Department Superintendent Linda Trujillo about the announcement. “The Cannabis Control Division is committed to supporting licensees to maximize the economic opportunities that adult-use cannabis sales offer our state.”

The rules were published on the New Mexico Commission of Public Records website in four different sections: General Provisions, Licensing and Operational Requirements for Cannabis Establishments, Cannabis Plant Limits and Process to Address Shortage of Cannabis Supply in the Medical Cannabis Program and Fees.

One point of concern has been rules regarding allowances for large-scale cannabis cultivators. Following two public hearings, the final rule text states that cultivators may grow between 6,000 and 8,000 mature plants (or up to 10,000 if they have special approval from the state). There are varying levels of farm sizes ranging from Level 1 (201-1,000 plants), Level 2 (1,001-3,000 plants), Level 3 (3,001-6,000 plants) and the final tier, which includes the information above. Originally, the Cannabis Control Division set plant caps at 4,500 per producer.

The rules also address the growing concern of shortage of medical cannabis. “Upon the division allowing commercial cannabis retail sales, cannabis retail establishments shall make reasonable efforts to sell a minimum of 25 percent of their monthly cannabis sales to qualified patients, primary caregivers and reciprocal participants, or to other licensed cannabis retail establishments that meet or exceed the 25 percent sales to qualified patients, primary caregivers and reciprocal participants until December 31, 2022,” the rules state. The rules also detail a plan for addressing further shortages if they persist through December 2022.

Finally, a section dedicated to social equity efforts states that a plan will be created no later than October 15, 2021, and will include numerous guidelines regarding disproportionately affected communities, individual assessments and any incentives for social equity applicants.

New Mexico is the 17th state to legalize recreational cannabis, which was made official when Governor Michelle Lujan Grisham signed legislation in April 2021. The law, which took effect on June 29, legalizes possession of up to two ounces of cannabis and allows residents to cultivate up to six mature plants for personal use. Recreational cannabis sales are expected to launch by April 2022, although it is possible that they could start sooner than April if the rules are well received and not challenged in court.

In addition to the rule announcement, a recent court ruling established that the Department of Health and the Regulation and Licensing Department cannot enforce purchase limits for medical cannabis or take away rights of medical cannabis patients that they receive under state law, effectively increasing the amount of medical cannabis that can be purchased by patients.