As we previously wrote about here, New Mexico passed a recreational cannabis statute with a very ambitious timeline. The next key date in that timeline is June 29. That is the date when the statute goes into effect. It is also when the public comment period ends for the proposed rules published by the New Mexico Regulation and Licensing Department (RLD).
Some key components of the proposed rules are that the New Mexico Cannabis Control Division will issue two classes of licenses: (1) cannabis producers and (2) cannabis microbusinesses. The rules set out a three-tiered plant restriction system, but they also require an applicant to submit a cultivation plan that must discuss the intended canopy square footage, as well as clarify how the canopy is to be calculated. There is no canopy limit identified in the proposed rules, but New Mexico’s “weed czar” Linda Trujillo has indicated that the RLD is still deciding between plant limits or canopy limits (our bet is the RLD goes with plant limits as it seems like an easier fee structure for the RLD to enforce). Additionally, the rules specify that applicants will need proof of a valid water right, description of criminal convictions (if any) and proof that the proposed location is at least 300 feet away from a school or daycare center. These clearly identified requirements should be easy for applicants to comply with and a local real estate agent can likely find a sufficient piece of property. However, the proposed rules also have another, more subtle provision that will likely significantly shape the New Mexico cannabis industry.
The proposed rules require that “all production activities are done on premises that are in compliance with state and local laws, including but not limited to zoning, occupancy, licensing, fire safety, food safety, worker protection and building codes.” Indeed, the proposed rules require an applicant to provide “a copy of a current business license, fire inspection report, certificate of occupancy, and zoning approval.” In other words, there’s more to this than simply finding a piece of property that has water and is more than 300 feet away from a school. Local zoning meetings are going to be must-watch events for those targeting certain municipalities as zoning boards try to shape where they intend to allow cannabis production to occur within their borders. For example, Albuquerque is currently considering a zoning regulation that would prohibit cannabis establishments from being within 300 feet of property zoned residential. If the regulation were to pass, it would obviously severely restrict where cannabis establishments could operate within Albuquerque and it could even force existing medical establishments to move. All of this is a long way of saying that hopeful cannabis applicants must do their homework before taking steps to secure real estate.
New Mexico continues to move quickly and is on track to hit its ambitious goal of a fully operational recreational market by April 1, 2022. There are certainly opportunities in New Mexico to break into the cannabis industry and we can assist those who interested. Be sure to follow our blog if you are interested in seeking licenses in New Mexico and to stay abreast of what is happening in the cannabis industry.