What Are the Cannabis Licensing Requirements in New Mexico? (May 2024)

The enchanting landscapes of New Mexico have long been known for their natural beauty, but now they are becoming famous for something else – cannabis. With both adult-use and medical marijuana now legal, the Land of Enchantment has stepped into the realm of green opportunities. Let's dive into the details of New Mexico's cannabis licensing requirements and the journey that led to this historic moment.

The New Mexico Cannabis Regulation Act (CRA)

On April 21, 2021, Governor Michelle Lujan Grisham signed into law HB 2, the New Mexico Cannabis Regulation Act (CRA). This momentous occasion marked the legalization of adult-use marijuana in the state. By June 29, 2021, the provisions allowing for the possession and adult-use of marijuana became effective.

The CRA not only granted access to adult-use cannabis but also laid down important limits and provisions. Individuals of legal age are allowed to purchase and publicly possess up to two ounces of cannabis, sixteen grams of cannabis extract, and 800 milligrams of edible cannabis. Moreover, each adult has the opportunity to cultivate up to six cannabis plants at home, with a household limit of 12 plants. The CRA showcases a balanced approach, encouraging responsible use while ensuring access for individuals.

The Birth of the Cannabis Control Division (CCD)

The CRA didn't just bring legalization; it also established the Cannabis Control Division (CCD) within the Regulation and Licensing Department. This division plays a pivotal role in the regulation of both medical and recreational marijuana. It issues licenses, makes crucial rules and regulations, and administers the cannabis landscape in New Mexico.

The CRA mandated that by September 1, 2021, the CCD should begin processing licensing applications. Additionally, it was tasked with creating a Cannabis Regulatory Advisory Committee to ensure that the cannabis industry operates with transparency and accountability.

Cannabis Licenses in New Mexico

The Cannabis Control Division is the regulatory authority that oversees all licensees participating in New Mexico's cannabis markets. This division plays a pivotal role in managing applications and issuing licenses for adult-use cannabis establishments. Its primary mission is to provide valuable licensing information to applicants and licensees, simplifying the application and licensing procedures and ensuring strict compliance with pertinent laws, regulations, and policies.

If you're a first-time applicant eager to enter the cannabis industry, it's crucial to identify the specific license type that aligns with your business model. Let's explore the diverse range of license types available to prospective entrepreneurs and operators.

Cannabis Consumption Area License

A cannabis consumption area license authorizes the establishment to serve and provide spaces for the consumption of cannabis products. It's essentially a designated location where individuals can enjoy cannabis in a controlled and supervised environment. However, it's important to note that the sale or consumption of alcohol within a cannabis consumption area is strictly prohibited. Additionally, local jurisdictions have the authority to approve or deny licenses for cannabis consumption areas, which means applicants need to be aware of their local regulations.

Cannabis Courier License

A cannabis courier license is granted to individuals or businesses that specialize in the transportation of cannabis products. These products may be transported to qualified patients, primary caregivers, or reciprocal participants, or they may be delivered directly to consumers. Cannabis couriers play a vital role in ensuring the safe and efficient distribution of cannabis within the state. This license opens the door to a critical aspect of the cannabis supply chain and offers an opportunity for entrepreneurs to contribute to the industry's growth.

Cannabis Manufacturer License

A cannabis manufacturer license is granted to individuals or businesses with the authority to process and prepare cannabis into usable products. These licensees must collaborate with third-party cannabis testing labs to ensure the quality and safety of their products. Furthermore, they are responsible for packaging cannabis products for retail use. This license also permits the purchase, acquisition, sale, or transportation of wholesale cannabis products to other cannabis establishments. Cannabis manufacturers are at the heart of product innovation and quality assurance within the industry.

Cannabis Producer License

Cannabis producer license holders specialize in the cultivation of cannabis plants. They are allowed to cultivate unprocessed cannabis plants and have their unprocessed cannabis products tested by third-party cannabis testing labs. While they can transport unprocessed products to other cannabis establishments, their primary focus is on wholesale distribution of cannabis products. Cannabis producers play a pivotal role in ensuring a stable and reliable supply of cannabis within the state.

Cannabis Producer Microbusiness License

This license is tailored for individuals or businesses that want to operate on a smaller scale. A cannabis producer microbusiness is authorized to produce cannabis products at a single premise, with no more than 200 total mature cannabis plants at any one time. This license type offers a more accessible entry point for entrepreneurs looking to engage in cannabis cultivation within defined limits.

Cannabis Research Laboratory License

Cannabis research laboratories are established to facilitate in-depth research on cannabis cultivation, characteristics, and uses. These licensed facilities produce and possess cannabis products and all parts of the cannabis plant genus exclusively for research purposes. However, they do not engage in testing cannabis or cannabis products for wholesale or retail use.

Cannabis Retailer License

A cannabis retailer license authorizes individuals or businesses to sell cannabis products to a variety of consumers. They can provide these products to qualified patients, primary caregivers, or reciprocal participants, and also directly to consumers who are 21 years of age and older, provided they have active and valid identification. Cannabis retailers serve as the public-facing outlets where consumers can access a diverse range of cannabis products.

Cannabis Testing Laboratory License

Cannabis testing laboratories play a critical role in ensuring the safety and quality of cannabis products. They are authorized to sample, collect, and test cannabis products exclusively for wholesale or retail use. These laboratories do not produce or possess any part of the cannabis plant genus for research purposes.

Integrated Cannabis Microbusiness License (MICB)

The integrated cannabis microbusiness license combines various functions under one license type. Holders of this license can engage in the production of cannabis at a single licensed premise with no more than 200 mature cannabis plants at any one time, manufacture cannabis products at the same premise, conduct sales and transportation of cannabis products produced or manufactured by their business, operate a single retail establishment, and offer courier services for cannabis products. However, it's important to note that a micro integrated cannabis business may not have multiple sublicenses of each type under the mother MICB license, only one of each function.

Vertically Integrated Cannabis Establishment License (VICE)

The vertically integrated cannabis establishment license is the most comprehensive, as it authorizes licensees to operate as cannabis couriers, manufacturers, producers, and retailers. Unlike the integrated cannabis microbusiness license, VICE license holders may have multiple sublicenses of each type under the mother VICE license.

New Mexico's cannabis industry presents an exciting spectrum of opportunities for entrepreneurs and enthusiasts. These distinct license types cater to various facets of the cannabis supply chain and offer a wealth of avenues for business growth and contribution to the state's dynamic cannabis landscape.

Understanding the intricacies of each license type is essential when considering entry into New Mexico's burgeoning cannabis market. It's not only about choosing the right fit for your business but also about ensuring compliance with local and state regulations. With the guidance and support of the Cannabis Control Division, navigating the licensing process becomes a more accessible endeavor, allowing businesses to thrive while contributing to the state's evolving cannabis landscape.

Taxation and Fund Allocation

One of the significant aspects of the CRA is its taxation framework. The act sets tax rates for marijuana sales and allocates the funds generated from these taxes. The revenue generated from the cannabis industry contributes to various public initiatives and projects. Importantly, it allocates funds to address the potential impacts of cannabis legalization on New Mexico's communities.

The CRA recognizes the concerns of employers related to cannabis use. It incorporates restrictions and requirements to address these concerns and strike a balance between individual rights and employer prerogatives.

New Mexico's taxation structure on recreational marijuana is set to evolve. The state currently levies a 12% excise tax on the sale of recreational marijuana. However, this rate is expected to increase to 18% before July 1, 2025. Subsequently, an annual 1% increase will continue until July 1, 2030. This progressive tax structure is designed to provide a stable source of revenue while ensuring that the industry remains competitive and accessible.

The Booming Cannabis Industry in New Mexico

Business licenses under the CRA began to be issued in April 2022, marking the commencement of the adult-use cannabis market. The state-wide launch of recreational sales occurred on April 1, 2022, and it was met with tremendous enthusiasm. In its first weekend, adult-use cannabis sales surpassed $5.2 million, and by the end of the first month, the total sales exceeded almost $39.5 million.

This booming success continued into the following months. May and June 2022 saw monthly sales figures of $38.5 million and $38 million, respectively. New Mexico's cannabis industry is off to a flying start, proving that the demand for both medical and recreational cannabis is substantial.

Medical Marijuana in New Mexico

New Mexico's journey into cannabis legalization doesn't start with the CRA. In 2007, the state approved the use of medical marijuana under the Lynn and Erin Compassionate Use Act. This act paved the way for individuals suffering from debilitating medical conditions to access medical cannabis. These conditions include cancer, glaucoma, multiple sclerosis, spinal damage, epilepsy, positive status for HIV or AIDS, and individuals admitted into hospice care.

In 2015, the state expanded the list of debilitating medical conditions to include “any other medical condition, medical treatment, or disease as approved by the [Department of Health] which results in pain, suffering, or debility for which there is credible evidence that medical use of cannabis could be of benefit.”

Conclusion

New Mexico's embrace of cannabis legalization reflects a balanced approach that recognizes both the potential benefits and concerns. With a robust regulatory framework, comprehensive taxation system, and growing industry, New Mexico's cannabis journey is setting an example for other states to follow. The Land of Enchantment is now also the land of opportunity for those interested in the cannabis industry, whether for medical or recreational purposes.