New Mexico Regulators Field First Public Comment on Legal Cannabis Rules

On Tuesday, the first day that New Mexico’s new home and cannabis possession policies took effect, regulators heard hours of public comment on everything from to licensing fees  — and plenty of topics in between. 

In late May, the state’s Regulation and Licensing Department released proposed rules for cannabis producers, or growers, that will guide this segment of the state’s adult use , from licensing to quality control. It was on these rules, which require that applicants show proof of valid water rights and locations setback at least 300 feet from schools, that regulators heard a day’s worth of comments. 

For context, New Mexico lawmakers passed the Cannabis Regulation Act in March after Gov. Michelle Lujan-Grisham called a rare special session to “get cannabis done.” 

“We are proactively stopping the disproportionate criminalization of people of color for cannabis possession, and we are building a new industry in which all New Mexicans can participate – and that will bring millions of dollars to our local communities and our state,” Lujan said in a statement at the time. 

Sales will not be live until next April at the earliest, but major themes emerged on Tuesday. These topics included, for example, how rural New Mexico residents can be included in the new industry, and concerns over established multistate operators swallowing up cannabis business opportunities in the state. Several commenters stressed the importance of regulators finding ways to lift up smaller operators, including a request that microbusiness license fees be reduced. 

And, multiple people spoke out about the need to conserve and protect water sources, including Paula Garcia, executive director of the New Mexico Acequia Association, whose mission is in part to protect water resources. 

“Our focus today is on water and equity. Acequias in rural communities are vulnerable to changes brought about by a new industry for adult use cannabis, due to the new demands for scarce water supplies, loss of land and water rights, ownership, and cultural erosion in centuries old land based communities,” Garcia said. The Association, she added, “advocated” for provisions in the legislation that shield existing water rights and water resources from what will likely be increased demand from the cannabis industry. 

Kevin Lutz, a startup founder who said he’s planning to apply for a license, asked rulemakers to place a moratorium, perhaps two to five years, on out-of-state cannabis businesses entering the market. Lutz also said he wants to see limitations placed on out-of-state ownership and wants  80% of any new cannabis company to be “owned by New Mexicans.” 

“This law was passed to benefit the citizens of New Mexico,” Lutz said.

James Montoya, of Cranium Extracts Manufacturing Company in Albuquerque, asked rulemakers to specifically consider how the rules would impact existing small cannabis businesses. has been legal in New Mexico for more than a decade.

“We just got licensed this year. It looks like next year we’re going to have to meet some more strict requirements that are going to put some more burden on us as a new business,” he said. 

Patricia Monaghan, a longtime cannabis lawyer in the state, said many of her clients are now asking the same question: will all of the requirements in the regulations need to be satisfied before an application is submitted to be considered for a license? 

“Requiring documentation of ownership of property to be used prior to being approved for license is difficult or probably an insurmountable barrier to entry. It’s just too much of an impediment for the smaller entrepreneur, the small business owner, that wants to get going,” Monaghan said. “You can’t ask them to do all that before they’re even licensed, before they’re even starting their business.” 

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