Q & A: Policy choices abound in legalization debate

How do you tax it?
A marijuana legalization working group established by Gov. Michelle Lujan Grisham last year recommended taxation of 20% or less. The members suggested 17% in gross receipts and excise taxes, divided among state and local governments.

Setting the taxes too high runs the risk of fueling the underground market by causing high prices. But setting the tax too low runs the risk of failing to generate enough revenue to cover government costs.

Colorado has a 15% excise tax and a 15% sales tax. Oregon has a 17% sales tax, and Washington has 37%. Alaska has a by-the-ounce tax, and some states have a mixture of tax by weight and sales taxes.

Where should the revenue go?

Estimates on how much revenue – direct and indirect – would be generated vary widely. A fiscal analysis of a 2019 proposal estimated about $78 million in annual revenue.

The governor’s working group offered a range of estimates, from $55 million in tax revenue the first year to $109 million a year as the market grows. Industry projections put the number between $130 million and $170 million.

The group suggested dedicating the revenue to regulation, public health programs, law enforcement training and equipment, economic development, and the state’s general fund, where the governor and legislators would determine priorities.

Local governments would also have extra revenue to decide on.

How will legalization affect the medical cannabis program?

Lawmakers have repeatedly wrestled with how to ensure the recreational market doesn’t interfere with the supply for the more than 100,000 patients enrolled in New Mexico’s medical cannabis program. Plant limits on medical marijuana producers already face criticism from patients who say it leads to shortages.

A proposal Martinez is working on would tap some of the money generated by recreational cannabis sales to eliminate the gross receipts tax on medical marijuana products and create a new assistance fund for low-income patients.

How should the state address workplace intoxication?

Business groups have repeatedly expressed concern about whether they could maintain drug-free workplaces. Cannabis consumers, in turn, might want protections against being fired for legal off-duty use.

Democratic Rep. Antonio “Moe” Maestas of Albuquerque – who has worked with Martinez on legalization bills – said state law would still allow employers to prohibit marijuana use as a condition of employment.

Can the state keep marijuana away from children and young people?

Child-resistant packaging is expected to be part of the debate. State officials might also set limits on advertising targeted at minors. More broadly, the state is expected to determine whether warning labels and other information should appear on products, similar to alcohol and tobacco.

Who can sell it and where?

Lawmakers will have to determine who is allowed to have a license to produce marijuana and where it may be sold. A bipartisan legalization proposal in 2019 called for limiting cannabis sales to state-run stores, similar to alcohol regulations in Utah. More recent proposals haven’t included the concept.

Lawmakers are also expected to consider how to ensure smaller, low-income groups have access to cannabis business licenses.

Where can it be consumed, possessed and grown?

Past legislative proposals have allowed individuals with a license to grow their own cannabis, with a limit on the number of plants.

Policymakers would address limits on how much cannabis a person may possess and whether they could consume the product in public or elsewhere outside the home. A proposal Martinez is working on would permit cannabis use in designated areas of licensed dispensaries but prohibit public use.

Can local communities opt out?

Some lawmakers say their own communities should be able to determine whether to allow marijuana sales. But others say local opt-outs would create an illicit market and lead to complications better avoided by uniform rules throughout the state.

Lawmakers may also consider whether cities and counties could set their own limits on where cannabis dispensaries or producers may be located.

In Colorado, cities and counties may opt out of the sale of recreational cannabis by barring dispensaries from operating within their boundaries.

How should the state handle past marijuana convictions and impacts of the war on drugs?

A 2020 proposal called for automatically expunging marijuana possession convictions. Martinez said he will propose some of the revenue go into a community reinvestment fund designed to help communities disproportionately harmed by the war on drugs.

How do police address driving while intoxicated?

Unlike alcohol, there’s no standard breath test for cannabis use. Colorado has an established impairment level based on how much THC is in a person’s blood.

But New Mexico legislators have also debated whether a blood test accurately captures actual impairment, contending someone could have cannabis in their system from past use long after the high has worn off.

New Mexico law already allows officers to prove impairment without a breath test for alcohol and other drugs. Prosecutors could cite a driver’s performance on roadside sobriety tasks, admission of use, evidence in the car and other factors.

There are officers trained in recognizing whether a driver is under the influence.

Rehm, a retired sheriff’s captain, said the lack of a clear standard on what constitutes marijuana impairment would make it easier for defense attorneys to fight prosecution.