New Mexico Dispensary Laws

PUBLISHED AUGUST 13, 2021
 
The New Mexico House and Senate passed a bill to legalize cannabis for adults 21 and older on March 31, 2021. The bill was signed into law by Gov. Michelle Lujan Grisham on April 12, making New Mexico the 18th state to legalize recreational cannabis and the fifth to do so through the legislative process rather than by voter initiative.
 
The Cannabis Regulation Act (CRA) officially went into effect on June 29, 2021. The CRA has created a comprehensive licensing, taxing, and enforcement regulatory structure for adult-use cannabis in the state that will be administered by the Cannabis Control Division (CCD). The CCD will also administer licensing and regulatory provisions of the Medical Cannabis Program in New Mexico.
 
Dispensaries are expected to begin recreational cannabis sales by April 2022. This page is informational only and should not be considered legal advice.
 

New Mexico Cannabis Laws

An overview of the medical and recreational marijuana laws in New Mexico.

Who can purchase cannabis in New Mexico and what are the limits?

Adults 21 and older are allowed to:

  • Possess, purchase, and give other adults up to two ounces of cannabis, up to 16 grams of concentrated marijuana, and 800 milligrams of edible cannabis.
  • Create cannabis-infused foods at home or perform extracts that do not involve volatile solvents.
  • Possess a larger amount of cannabis, if it is stored in a locked space at the person’s residence that is not visible from public spaces.
  • Possess, manufacture, and give away paraphernalia.

Are there any qualifying conditions for medical marijuana patients in New Mexico?

The NMDOH maintains a complete list of qualifying conditions. Patients with the following conditions can qualify for medical marijuana use:

 

  • Alzheimer's Disease
  • Amyotrophic lateral sclerosis (ALS), or Lou Gehrig's disease
  • Anorexia
  • Autism Spectrum Disorder
  • Cachexia, or wasting syndrome
  • Cancer
  • Cervical dystonia
  • Crohn's disease
  • Epilepsy and seizure disorders
  • Glaucoma
  • Hepatitis C
  • HIV/AIDS
  • Hospice care
  • Huntington's disease
  • Inclusion-body myositis
  • Inflammatory autoimmune-mediated arthritis
  • Intractable nausea or vomiting
  • Intractable spasticity
  • Lewy body disease
  • Multiple sclerosis
  • Obstructive sleep apnea
  • Opioid use disorder
  • Peripheral neuropathy
  • Parkinson's disease
  • Post-traumatic stress disorder (PTSD)
  • Severe chronic pain
  • Spinal cord damage
  • Spinal muscular atrophy
  • Ulcerative colitis

Is home cultivation allowed in New Mexico?

Yes, recreational marijuana can be grown by adults aged 21 or older, but cultivation is prohibited to to six mature and six immature cannabis plants, with a maximum of 12 mature plants per household. Cultivation must only take place in an enclosed area where the marijuana plants are not visible to the public.

Qualified patients may apply for a personal production license, allowing them to grow cannabis for personal use.

Where can cannabis be consumed in New Mexico?

Cannabis consumption is limited to private property out of public view. Adults, patients, and caregivers may face criminal prosecution or civil penalties for possession, distribution, transfer, or consumption in a school bus or public transportation vehicle, school campuses, workplaces, public parks, recreation centers, or youth centers. Driving under the influence of cannabis is illegal and consumption in a vehicle is prohibited for drivers and passengers.

Retail Cannabis Licensing in New Mexico

Everything you need to know about opening a retail cannabis location in New Mexico.

What state agency is in charge of cannabis licensing in New Mexico?

The Cannabis Control Division, a part of the Regulation and Licensing Department, will create rules to license and regulate cannabis businesses. The Division will license 10 types of cannabis businesses: couriers, producers (growers), manufacturers, retailers, microbusinesses, cannabis consumption areas, vertically integrated establishments, and integrated microbusinesses.

Who can apply for a Cannabis dispensary license?

Any qualified applicant can apply for a cannabis dispensary license in New Mexico. Within 90 days of deeming an application complete, the Division will grant or deny the license. Applicants must not haveany  prior convictions related to qualifications, functions or duties. This includes felony convictions involving fraud, embezzlement, or deceit, or involving a minor in drug sales but past cannabis convictions are excluded.

What is the process for obtaining an adult-use cannabis retail license in New Mexico?

As per the timeline, the CCD will accept and begin processing license applications for all license types by Dec 2021. By September 1, 2021, the cannabis regulatory advisory committee will be convened and The Cannabis Control Division will start accepting applications for producers, microbusiness producers, and from medical cannabis businesses. By January 1, 2022, the Division will accept applications for all other license types, including for cannabis education and training programs.

 

Watch this space in 3-6 months from now for more details on the application process as they are released.

What are the application and license fees in New Mexico?

Fees for most license types are $2,500 per year, plus $1,000 for each licensed premises.

 

  • Courier fees are up to $1,500 per year and $1,000 for each additional licensed premises.
  • Integrated microbusiness fees are up to $2,500 per year and $500 for each additional licensed premises.
  • Vertically integrated cannabis establishment fees are $7,500 per year, plus $1,000 for each licensed premises.
  • Vertically integrated cannabis businesses’ initial application and annual renewal fees cannot exceed $125,000 per license for both medical and adult use.
  • Fees are reduced by half for medical dispensaries only.

Has New Mexico incorporated any social equity provisions?

  • Cannabis rules must include procedures that promote and encourage full participation in the cannabis industry governed by the Cannabis Regulation Act by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions, rural communities likely to be impacted by cannabis production and agricultural producers from economically disadvantaged communities.
  • Rules must include procedures to encourage diversity among applicants, licensees, and staff.
  • The Cannabis Control Division will develop a certification for cannabis produced by microbusinesses or licensees that are owned by someone from a community that was disproportionately harmed by cannabis prohibition.
  • The Division will produce annual reports on diversity in the industry.

New Mexico Cannabis Retail and Dispensary Establishment Laws

Learn how to remain compliant with New Mexico’s cannabis retail laws.

Where can a cannabis retail establishment be located?

Municipalities and counties may adopt time, place, and manner rules including “rules that reasonably limit the density of licenses and operating times consistent with neighborhood uses. More details to come.

Whom can New Mexico cannabis retailers sell to?

Licensed adult-use cannabis retailers may sell cannabis to adults aged 21 and older, with a valid government-issued identification card, and employees are required to check purchasers’ IDs before making the sale.

What products can a New Mexico marijuana retailer sell?

Marijuana stores may sell cannabis, cannabis resin, cannabis products, cannabis edibles, cannabis extracts, seedlings, immature marijuana plants, and marijuana paraphernalia.

Can medical marijuana and recreational cannabis be sold in the same dispensary?

Yes, Medical marijuana dispensaries that obtain a recreational marijuana dispensary license could operate both entities in the same/shared location.

What taxes are collected on retail cannabis in New Mexico?

  • A cannabis excise tax is levied on retail sales. It starts at 12% until July 1, 2025, and then increases by one percentage point per year, maxing out at 18% on July 1, 2030. The tax does not apply to any sales to registered patients, caregivers, or visiting patients from other states.
  • One-third of the cannabis excise tax revenue will go to the municipality where the sales were made. Another third of the cannabis excise tax revenue will go to the county where the sales were made.
  • Gross receipts taxes — which range from 5.125% to 8.8125%, depending on the location in the state — would apply to adult-use, but not medical, cannabis.

How many cannabis business licenses will be issued in New Mexico?

There is no set limit on the number of business licensees that could be granted under the program, or the number of facilities a licensee could open, although regulators could stop issuing new licenses if an advisory committee determines that “market equilibrium is deficient.”

What are the packing and labeling requirements for a cannabis retail store in New Mexico?

The Cannabis Control Division will develop rules — which must be consistent with industry standards — on advertising, health and safety, testing, labeling and packaging, regarding additives (including banning nicotine), quality control, and environmental protections.

Packaging cannot be designed to appeal to minors and must be child-resistant. Warnings must be included on possible adverse events, along with the number for New Mexico’s poison control.

What are the marketing and advertising restrictions in New Mexico pertaining to cannabis sales?

  • Advertising is banned on TV, radio, and mass transit, and other than to adults who opt-in or who subscribe to subscription-based media.
  • Advertising cannot use predatory marketing targeting minors, use cartoon characters, or mimic other brands.
  • The Division will develop rules for cannabis training and education programs.

Cannabis Tracking and Reporting in New Mexico

Every regulated cannabis market has its own tracking and reporting requirements. Find here how New Mexico monitors commercial cannabis activity.

What are the tracking, reporting, and inventory control requirements for New Mexico marijuana establishments?

Most states require dispensaries and cannabis stores to track and trace all of their cannabis products for regulatory and compliance reporting requirements. Records identifying the source of each ingredient must include the date of receipt of the ingredient, vendor’s name and address, name of the ingredient, etc. A compliant POS software system helps you do all of that without any worries or violations.

 

There should be records consisting of cannabis transfer information, such as where the dispensary gets its product and how much went into inventory. Inventory should be kept at a minimum each morning, taking into account transfers, sales, disposals, harvests, etc.

What is New Mexico’s official cannabis monitoring system?

New Mexico is currently contracted with BioTrack as the state mandatory tracking system for medical cannabis. The department will likely use the same tracking system for recreational cannabis as well once it establishes regulations. Authorities will always expect an adequate inventory control system for safeguarding records and patient information, especially for medical marijuana.

Is Cova compliant with New Mexico’s cannabis retail reporting requirements?

Yes. Cova's Cannabis Dispensary POS Software and inventory management system adheres to all reporting requirements, can be integrated easily with official reporting systems, including BioTrack, and includes all the features needed to keep cannabis retailers compliant, including:

  • ID scanner for age and card verification
  • Integrated inventory and sales tracking and reporting
  • Built-in product equivalency conversions and purchase limit enforcement.
ron-segev

RON SEGEV

Cannabis Business Lawyer & Founding Partner, Segev LLP

Legally reviewed by

RON SEGEV

Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.

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