How to Apply for an Adult-Use New Mexico Cannabis License
The New Mexico Legislature recently voted to legalize recreational cannabis through the House Bill 2 that was recently passed by two House committees.
The bill, sponsored by Reps. Javier Martinez, Andrea Romero, and Deborah A. Armstrong passed the House Health and Human Services Committee on Feb. 15 and passed the House of Taxation and Revenue Committee on Feb 24. Now, on March 31, it passed the Senate on a 22-15 vote.
It then returned to the House, which had approved it 38–32 earlier in the day, for consideration of Senate changes. That vote passed by a voice vote.
Legal retail sales are scheduled to begin by April 1, 2022.
Lawmakers say legalization could inject $318 million into the economy in its first year and create 11,000 jobs.
If you live in the state and want to hop into the New Mexico Cannabis industry, you should start preparing yourself to apply for a cannabis license. The cannabis industry it’s very changing when it comes to its regulations, New Mexico is not the exception.
However, regulations are still being drafted and there are a lot of important details to be determined, so we can expect many updates on legalization in the following months.
When Will the New Mexico Cannabis License Applications be Open?
The Cannabis Control Division is going to start accepting and processing New Mexico Cannabis license applications in accordance with the following schedule:
- September 1, 2021: Cannabis producers; cannabis producers microbusinesses and any other person properly licensed and in good standing as a licensed cannabis producer pursuant to the Lynn and Erin Compassionate Use Act.
- January, 2022: All other licenses.
The Cannabis Control Division (CCC) is scheduled to develop a plan to encourage racial, ethnic, gender and geographic diversity among licensees by no later than January 1, 2022.
What are the types of New Mexico Cannabis Licenses?
According to the recently passed bill, in New Mexico you’d be able to apply for the following licenses:
cannabis consumption areas;
cannabis producer microbusinesses;
cannabis research laboratories;
cannabis testing laboratories;
cannabis training and education programs;
integrated cannabis microbusinesses; and
vertically integrated cannabis establishments.
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How to Apply for a New Mexico Cannabis License
To this date, the entire requirements for applying for a New Mexico Cannabis License have not been established. Final license rules would be due from the state by January 1, 2022, with licenses themselves issued no later than April 1.
This does not mean that you cannot start preparing yourself for the endeavor. On the contrary, there are a number of things you could be doing in order to start preparing your company for the licensing process.
But first, let’s establish what does the newest legislation draft say about requirements for a New Mexico Cannabis License:
The Cannabis Control Division shall require as a condition of licensing that the applicant has the legal right to a commercial water supply, water rights or another source of water, sufficient to meet the water needs as determined by the division related to the license as evidenced by documentation from the office of the state engineer of a valid water right or from a water provider that the use of water from cannabis is compliant with that water provider’s rules.
Further, if an applicant applies for a cannabis producer license or a cannabis manufacturer license, in addition to the requirements mentioned above, the division shall require that the applicant submit a plan to use, or demonstrate to the division that the applicant cannot feasibly use, energy and water reduction opportunities, including:
- For a cannabis producer, drip irrigation and water collection;
- Natural lighting and energy efficiency measures; and
- Renewable energy generation; and
The division must allow commercial cannabis activity retail sales no later than April 1, 2022 and otherwise allow activities authorized by the Cannabis Regulation Act or the medical cannabis program as of the time of licensure of a licensee, so long as a minimum of twenty-five percent of monthly cannabis sales are to qualified patients, primary caregivers and reciprocal participants or sold wholesale to other licensees that meet or exceed the twenty-five percent sales to qualified patients, primary caregivers and reciprocal participants until December 31, 2022.
Further, there’s the following regulations regarding licensing in New Mexico:
- A license issued pursuant to the Cannabis Regulation Act shall not be subject to execution, attachment, a security transaction, liens or receivership.
- The division shall not limit the number of licenses of any kind, the scope of licenses or the activities a licensee is authorized to conduct under the Cannabis Regulation Act
- In carrying out its commercial cannabis activity licensing duties, the division shall:
- Issue a license or a written notice detailing why an application was denied no later than ninety days following the day on which the application was submitted to the division
- Require as a condition of licensing pursuant to the Cannabis Regulation Act that the applicant demonstrate that the applicant has a legal right to a commercial water supply, water rights or another source of water sufficient to meet the water needs related to the license, and, if an applicant applies for a cannabis producer license or a cannabis manufacturer license, submit a plan to utilize, or demonstrate to the division that the applicant cannot feasibly utilize, energy and water reduction opportunities
Additionally, the CCC will deny an application for a license -or the renewal of a license- if:
- The application does not include significant information required by the division
- The applicant or a controlling person in the applicant’s entity has been convicted of an offense that is substantially related to the qualifications, functions or duties of the applicant entity’s business; provided that if the division determines that the controlling person and the applicant entity are otherwise qualified for a license and that issuing a license to the applicant entity would not compromise public safety, the division shall conduct a thorough review of the conviction, including the nature of the offense, surrounding circumstances and any evidence of the controlling person’s rehabilitation following the conviction, and based on that review, determine whether the applicant entity should be issued a license
- The applicant or a controlling person in the applicant’s entity has had a license issued pursuant to the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act revoked by the division or the department of health in the three years immediately preceding the date on which the application was filed
- If the licensee fails to regularly and consistently operate for a minimum of thirty-two hours per week, on average, for the duration of its licensure on or after July 1, 2021
- The division shall deny an application if an applicant, a controlling person in an applicant’s entity or the premises for which a license is sought does not qualify for licensure pursuant to the Cannabis Regulation Act.
Unless otherwise provided in the Cannabis Regulation Act, a person whose license has been revoked may reapply for a license after a period of three years. The division may consider all of the circumstances resulting in the revocation in determining whether to issue a new license
Even though the legislation doesn’t explicitly state this, usually states require any applicant to present a Business Plan, some background information on the members of the company and extra documentation regarding what would be the scope of the operation. So you could realistically start preparing yourself for the endeavor beforehand -which, in fact, would be highly recommended-.
How Much is a New Mexico Cannabis License Going to Cost?
The CCD has to establish the application and licensing fees applicable to the adult-use cannabis activity. Money collected for the fees shall not exceed the cost of administering and enforcing the programs established in the Cannabis Regulation Act and the Lynn and Erin Compassionate Use Act, including the administration of the medical cannabis registry by the department of health
The newest legislation on the matter establishes that for fees assessed through January 1, 2026, the fees shall consist of a base annual fee of two thousand five hundred dollars ($2,500) per year, an additional fee of one thousand dollars ($1,000) for each licensed premises of the licensee and for a vertically integrated cannabis establishment licensee, an initial application fee and an annual renewal fee.
Further, the initial application fee and the annual renewal fee for a vertically integrated cannabis establishment license shall not exceed one hundred twenty-five thousand dollars ($125,000) for a license for both medical cannabis activity and commercial cannabis activity.
The initial application fee and the annual renewal fee for a license or renewal of a license that authorizes only medical cannabis activity shall be one-half the fee applicable to a license authorizing both medical cannabis activity and commercial cannabis activity.
Finally, the division shall charge five percent of the maximum fee assessed for a vertically integrated cannabis establishment licensee as the licensing fee for a cannabis producer microbusiness or an integrated cannabis microbusiness; provided that if a cannabis producer microbusiness or an integrated cannabis microbusiness enters into any business arrangement with another such entity with the purpose or having the effect of evading the limitations of the licensee’s license, such licensee shall not be eligible for the lower fee prescribed by the legislation.
These fees -obviously- do not include operating costs, which will vary depending on the type of license your company is looking for, as well as the size and quality of the operation. In this sense, depending on the type of license, you’d be looking to raise anywhere from $250,000 to $1,000,000 to be on the safe side.
If you need help raising some money for your venture, make sure to check out our Startup Bundle package, which provides the tools to find investors and raise money -legally- to put it into your application and operation.House-Bill-12
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