New Mexico sets stage for legalized pot sales

New Mexico expects to begin taxing legal marijuana sales a year from now under legislation signed this month by Gov. Michelle Lujan Grisham.

“The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” Lujan Grisham said in a signing ceremony.

New Mexico joins neighbors Arizona and Colorado as states that have legalized recreational marijuana sales.

Gov. Michelle Lujan Grisham signs legislation in Santa Fe.

Marijuana sales could amount to $318 million in the first year, creating over several years what could be more than 11,000 new jobs, according to Kelly O’Donnell, independent economist and public finance expert.

The excise tax imposed on the product will raise at least $20 million for the general fund in the first full fiscal year, with growth in following years, officials said. Local governments will also gain a source of revenue.

“We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed war on drugs,” Lujan Grisham said. “And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better.”

Lujan Grisham, a Democrat who has advocated for legalization since taking office, signed a measure to expunge old low-level cannabis convictions along with early release of prisoners held on those convictions.

“Thousands of people, and a disproportionate number of them from communities of color, have been wronged by this country’s failed war on drugs,” said Sen. Jerry Ortiz y Pino. “We will all benefit from our state’s smart, fair and equitable new approach to past low-level convictions.”

The law creates a Public Health Advisory Board to monitor cannabis use and data pertaining to the health effects of legalizing cannabis. The Department of Health is also required to provide annual reports, including information on youth access, driving and road safety, workplace safety, consumer and product safety and emergency room visits involving cannabis.

The launch of commercial sales for adults is expected no later than April 1, 2022. The issuance of licenses to conduct commercial cannabis activity will begin no later than Jan. 1, 2022, officials said.

Lujan Grisham’s signature on the marijuana law on April 12 came three days after her approval of a $7.4 billion state budget.

The budget for the year beginning July 1 maintains 24% of recurring expenditures in reserves, or $1.7 billion, and 1.5% raises for public school and higher education personnel, as well as state employees and front-line health and social service workers.

Budgets for state agencies were generally flat amid the pandemic with targeted increases for agencies covering health, education and early childhood well-being.

Spending will increase 5% over the amended fiscal year 2021 budget, with 36% of new general fund spending going to education initiatives.

“This legislative season has been a remarkable success for New Mexicans in every corner of our state,” Lujan Grisham said.

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