Cannabis: Forging New Rules For A New Industry

S. Fitzgerald: Greater Albuquerque Chamber of Commerce Legislative Update

If you followed this issue during the regular session, you’ll know that there are two major issues that prevented a Legislature otherwise predisposed toward legalization of adult use from reaching consensus:

• Whether there should be limits on the number of mature plants that can be grown and/or whether there should be a limit on the number of licenses issued, and;
• Whether “restorative justice” provisions should be included in the legalization bill or whether such provisions belong in a separate bill.

Let’s dive a little deeper into these. According to cannabis industry representatives, Oregon’s legalization resulted in a huge overproduction of the drug, which, in turn, led to the oversupply being dumped into the illicit or black market. In order to remedy the situation, Oregon imposed limits on production and licenses until the market achieved some equilibrium. Industry representatives argue that New Mexico should start out with such limits and only relax or eliminate them when a stable market is evident. Others, such as Representatives Javier Martínez (D-Bernalillo) and Andrea Romero (D-Santa Fe), who sponsored HB 12 (the measure that passed the House and was the leading contender for ultimate passage), don’t like this approach because they are concerned this will favor large players and keep prices artificially high (here’s that pun again). However, they were willing to compromise by allowing market intervention, but only after a finding is made that the market is in disarray and only until market equilibrium is achieved. For reasons unknown to us, this compromise apparently wasn’t enough. Martínez and Romero, along with Senator Cliff Pirtle (R-Chaves, Eddy and Otero) – sponsor of a competing proposal – all agree on one thing: they want to see small New Mexico farmers have a chance to enter and succeed in the industry. Pirtle’s approach is to have very low barriers to entry by keeping licensing fees low and allowing co-op approaches to growing and selling.

The issue of restorative justice is equally as thorny. Martínez and Romero have stated frequently that they believe the war on drugs was a manifestation of institutional racism aimed at Hispanics and African Americans. Therefore, they champion legalization not only for its alleged job and tax revenue creation benefits but also because they want to see past convictions for sale and use of cannabis expunged from criminal records. Others do not share this perspective, as one might imagine. Some say that if it was a crime when committed, then it should be reflected on a person’s criminal record. On a practical level, others say that often a conviction for sale and/or possession was the basis for a conviction and can be intertwined with other violations of the law, thus making expungement a problematic undertaking with potentially adverse unintended consequences. The path forward on this issue is unclear at this time.

Business Community Concerns

If legalization is to occur, then there are some very important parameters that the business community wants to see established in any legislation adopted:

• First and foremost, there must be language in the legislation that explicitly allows employers to maintain a drug-free workplace and be able to take appropriate actions, including the termination of employees found to have used cannabis through drug testing (or observable intoxication/impairment, of course). A drug-free workplace is especially vital in any industry where public and worker safety must be at the forefront, such as utility linemen working around dangerous high voltage lines or oil and gas industry field or facility operators. Drug-free workplace protection language was included in HB 12 during the regular session.
• Given that cannabis would remain illegal under federal law, legislation must provide an additional explicit protection for businesses that contract with the federal government or sub-contract on federal government work, ensuring that no contractor could be forced to adopt workplace policies that would jeopardize their work on federal contracts.
• There must be firm advertising and marketing restrictions, including sufficient efforts to prevent the use of cannabis by minors.
• Property owners must be allowed to restrict the use of cannabis on their property just as cigarette smoking can be restricted or prohibited.
• Tax revenues generated from the sale of cannabis should not be earmarked, but rather placed in the general fund for appropriation by the Legislature. After all, “economic and revenue diversification” is an apparent goal of the legalization movement. If they’re serious about that goal, they won’t earmark away the lion’s share of the new funding the state receives.
• Attention should be given to law enforcement training on how to detect drugged driving – something we feel will unfortunately be challenging to enforce in the absence of an objective test for impairment (which does not exist today). Indeed, the absence of an impairment test will undoubtedly create conflict in employment matters as well – a primary concern of ours.
• Local governments should be allowed to use their zoning authority to preclude sales and use in or near schools, places of worship and other culturally sensitive areas as well as to prevent “the green mile” phenomenon of one cannabis store after another (unless the local community favors such).
• And, it’s always a slippery slope to allow for the expungement of a person’s criminal record; we’ve been clear over the years that, if a person has committed a crime, it should be known on their public record.

We’re assuming that a compromise has been achieved since the Governor has called a special session (perhaps that’s not the case, but that would be unusual). Nevertheless, we expect there will be lively debate and attempted amendments along the way as a compromise rarely satisfies all the competing interests. Senate Majority Leader Peter Wirth (D-Santa Fe) expressed his view that the session would only take a day or two, another signal that consensus is likely to have been reached. On the other hand, we expected cannabis legalization to have been accomplished during the regular session. So, as Yogi Berra said, “It ain’t over ’til it’s over.”