New Mexico’s Senate failed to hear a marijuana legalization bill as time ticked down to the close of the legislative session on Saturday. With just hours left before lawmakers adjourned, however, Gov. Michelle Lujan Grisham (D) said she’ll call them back soon for a special session to consider the issue of ending cannabis prohibition.
“We’re going to have a special session in a week or so, and we’re going to get cannabis because I am not going to wait another year,” the governor said in comments to the Sandoval County Democratic Party on Saturday. “We’re going to win it and it’s going to have the social justice aspects that we know have to be in a package.”
The governor’s office said that as lawmakers continued through a session that stretched past midnight, Lujan Grisham “has had very productive conversations with leadership on both sides about a path forward on legalized adult-use cannabis.”
“It’s important enough and we’re close enough that the governor firmly believes it will be worth an extra effort to close the deal,” the statement said.
The legalization measure, HB 12, which passed the House of Representatives last month, was repeatedly delayed during the week amid a frantic push by lawmakers to make amendments to the nearly 200-page bill. While the full Senate was scheduled to hear the legislation Friday, it became clear over the course of the day that wouldn’t happen.
The legislature officially came to a close at noon Saturday. To make that deadline, the Senate would have had to pass the measure, then the full House would have needed to sign off on the Senate’s changes. If the House had rejected those amendments, the two chambers would’ve formed a conference committee to hammer out a deal.
“Everyone’s first preference is that this gets done and done right by 12 p.m. tomorrow,” said the Friday night statement from the governor’s office. “But there are a lot of priorities left to be heard, and only so many hours left, and legislators working very hard over long hours to move priorities.”
In a joint statement issued minutes after the governor’s announcement, the bill’s two lead sponsors, Reps. Javier Martínez (D) and Andrea Romero (D), said they “welcome any avenue” to pass the bill this year.
“We need to legalize adult-use cannabis tonight or in a special session,” the sponsors said. “House Bill 12 puts forward New Mexico’s best opportunity to establish a multi-million-dollar industry with a framework that prioritizes social justice and equal opportunity for our communities. The governor has made a commitment to sign a bill that represents our shared principles.”
— NM House Democrats (@NMHouseDems) March 20, 2021
The Governor has made a commitment to sign a bill that represents our shared principles, and we welcome any avenue, to do so. New Mexico is ready."
— NM House Democrats (@NMHouseDems) March 20, 2021
On Saturday, after the session’s end, Lujan Grisham said at a press conference that she feels “very confident that this legislative body is going to figure out all of the issues that still need a little bit of effort and debate, and we’re going to be ready to go.”
“I feel very confident that we are going to be able to announce adult-use cannabis in the very near future in New Mexico,” she said, adding that the special session could begin on or around March 31.
— Rachel Knapp (@RachelKnappNews) March 20, 2021
“Legalized adult-use cannabis is one of the best moves we can make in our work to build a bona fide 21st century economy in New Mexico,” the governor said in a press release. “I believe legalization will be one of the largest job-creation programs in state history, driving entrepreneurial opportunities statewide for decades to come. I look forward to continuing to work with lawmakers to get the job done and done right.”
Legalized adult-use cannabis is one of the best moves we can make to help build a bona fide 21st century economy in New Mexico.
We are very close. And we will finish the job. New Mexico is ready.
My full statement on the special session: pic.twitter.com/RUlusTFnRH
— Michelle Lujan Grisham (@GovMLG) March 20, 2021
Emily Kaltenbach, the senior director for resident states and New Mexico for the Drug Policy Alliance, and who served as a consultant to the bill’s sponsors, cheered the governor’s move to extend the discussion into special session.
“While we are disappointed that New Mexicans will have to wait a little bit longer to reap the benefits and justice cannabis legalization will provide—especially to Hispanic/Latinx, Black, Native and Indigenous communities, who have been disproportionately impacted by prohibition—after the legislature failed to pass House Bill 12 this session, we applaud Governor Lujan Grisham for acknowledging this cannot wait and indicating she will take up legalization in a special session,” she said.
NORML’s state policies manager, Carly Wolf, stressed that a failure to legalize cannabis this year would mean continued consequences for vulnerable communities.
“Lawmakers, for the moment, have once again failed to deliver common sense marijuana policy reform for the people of New Mexico — an overwhelming majority of whom support legalizing cannabis for adults,” she said. “In the interim, thousands of their constituents, disproportionately their constituents of color, will continue to be saddled with criminal records and the lifelong penalties and stigma associated with it.”
The latest official version of the bill was approved early Thursday morning by the Senate Judiciary Committee after a contentious late-night hearing, but the legislation is likely to change significantly by the time it comes to a vote in a special session. As the regular session’s end approached, journalists and lawmakers tweeted out reports of efforts to overhaul its core components.
“For those following marijuana legalization and assuming I was stalling the process, know that I’ve learned we will see a substantially rewritten bill today with fewer than 24 hours and zero committee on what it might be,” posted Sen. Joe Cervantes (D), the Judiciary chairman and a vocal opponent of the bill who said it was too poorly written to become law.
Around 3 today I received a rewrite of the legal marijuana bill from sponsors. Check version 220993.2. Much better writing and correcting many obvious errors. The bill has been out of SJC committee for two days, and so it is now up up to the full Senate.
— Sen. Joe Cervantes (@SenJoeCervantes) March 20, 2021
Cervantes tore into the bill’s language during the panel hearing a day earlier but declined to discuss possible changes with sponsors during that meeting. “I just don’t have the time tonight to do this with you,” he told them. “You all can do this tonight, tomorrow, and work on it harder. And you don’t need me to do that. If people were reading this bill carefully, they would realize that it’s wrong.”
In a tweet on Friday night, Cervantes again criticized the sponsors for not being able to write “an intelligible bill” in his view.
Martinez, for his part, replied by saying that he respects the chairman but asked him to “stop demeaning our work.”
But please 🙏🏽 stop demeaning our work. HB12 is a good bill. This has been a labor of love for the past few years. Now that the bill is effectively dead, we’ll go back & rewrite, taking all of your good feedback. We look forward to seeing you in SJC again soon. Thank you, Senator.
— Rep. Javier Martínez (@JavierForNM) March 20, 2021
Around 2:00 PM on Friday, reporter Andy Lyman of the New Mexico Political Report said multiple sources had told him of plans to remove HB 12’s section that would expunge past cannabis crimes “and somehow incorporate it into” a separate House bill about criminal records. That legislation was also ultimately not considered by the Senate prior to the end of the session.
By 7:00 PM, Lyman tweeted that he was hearing “that cannabis legalization, as of now, will not pass the Senate and may not even be heard by the end of the session.”
Minutes later, Sen. Cliff Pirtle (R), who introduced a competing legalization measure this session, told Marijuana Moment the bill wasn’t done just yet. “Working hard to fix it,” he said in a text message. “We have time.”
— Daniel Chacon (@danieljchacon) March 20, 2021
Pirtle, the ranking Republican in the Senate Judiciary Committee, had introduced a committee amendment earlier in the week that would have replaced the full text of HB 12 with language from his own measure, but the panel rejected that move.
At 8:30 PM, a reporter for The Daily Lobo tweeted that he asked HB 12 sponsor Romero about the status of the bill. “I wish I knew,” the representative replied. “I’m watching the clock tick like everyone else.”
As of early Saturday morning, HB 12 was still on the Senate’s calendar, although Sen, Jacob Candelaria (D), who sponsored yet another cannabis legalization bill this year, tweeted, “I do not expect recreational cannabis to pass this regular session, due in part to @NMHouseGOP scorched earth tactics to shut down the people’s house.”
“Special Session here we come,” he said.
13-ish hours till Sine Die.
I do not expect recreational cannabis to pass this regular session, due in part to @NMHouseGOP scorched earth tactics to shut down the people’s house.
— jacobcandelaria (@SenCandelaria) March 20, 2021
House Republicans appeared to take a temporary victory lap of sorts, tweeting that the governor “has FAILED to get her showpiece marijuana bill across the line.”
“She now says she will call us back next week,” the caucus said.
UNBELIEVABLE. After spending $2 million on a fence blocking YOU from the Roundhouse for a year- @GovMLG has FAILED to get her showpiece marijuana bill across the line. She now says she will call us back next week. Taxpayers, the Gov's agenda is on your dime. #nmpol #nmleg
— NM House Republicans (@NMHouseGOP) March 20, 2021
Legislative leaders settled on HB 12 from among a handful of legalization proposals introduced this session by both Democrats and Republicans. Over the course of the past several weeks, the bills’ sponsors have tried to unify the conflicting proposals and incorporate feedback from colleagues.
Cervantes has repeatedly framed the proposal as “all about money,” a critique he echoed at the committee hearing. “I’m sure the big guys have written this bill. I wasn’t born yesterday,” he said.
The chairman again complained about last-minute changes in a tweet on Saturday morning.
For those following marijuana, latest bill sent to me at 8:12 a.m.
— Sen. Joe Cervantes (@SenJoeCervantes) March 20, 2021
Pirtle, the Republican who brought a separate legalization bill this session, told Marijuana Moment that “it seems like the focus of House Bill 12 is social justice and not how to properly regulate cannabis.”
The bill has three major components, lead sponsor Martínez said at the most recent committee hearing: protecting existing medical marijuana patients, ensuring racial justice in how cannabis is legalized and establishing smart regulatory and tax systems.
“Is this bill perfect? Probably not,” he acknowledged. “Should this bill move forward, should we legalize cannabis in New Mexico this year, I can assure you that we will all be up here next year, making tweaks. That’s the way it should be … because good policy and good law should be evolving, especially when we attempt to do something as big as this.”
During the Senate Judiciary meeting, lawmakers amended the bill with changes to licensing rules, tax collection and criminal justice procedures, among other provisions. The revisions would also delay the proposed launch of commercial sales to April 2022. Sales would initially begin at existing medical marijuana dispensaries and newly licensed small businesses, then expand later in the year to all new licensees.
Pirtle on Saturday said he plans to “work with Democratic leaders and the governor” on crafting a revised legalization bill during the upcoming special session.
I introduced a carefully crafted, cannabis bill that could have passed. It didn’t receive a timely hearing and it was ignored until the complications in the House Bill surfaced. I plan to work with Democratic leaders and the Governor on legislation that addresses concerns. #nmleg
— Cliff Pirtle (@CliffPirtle) March 20, 2021
Marijuana Moment is already tracking more than 900 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
Polling indicates New Mexico voters are ready for the policy change. A survey released in October found a strong majority of residents are in favor of legalization with social equity provisions in place, and about half support the decriminalization of drug possession more broadly.
Say it again: New 👏 Mexico 👏 is 👏 ready. 👏
— Andrea Romero (@ARomero_NM) March 20, 2021
Gov. Lujan Grisham, meanwhile, included cannabis legalization as part of her 2021 legislative agenda and has repeatedly talked about the need to legalize as a means to boost the economy, especially amid the coronavirus pandemic. She said during a State of the State address in January that “a crisis like the one we’ve experienced last year can be viewed as a loss or as an invitation to rethink the status quo—to be ambitious and creative and bold.”
Additional pressure to end cannabis prohibition this year is coming from neighboring Arizona, where sales officially launched in January after voters approved a legalization ballot initiative last year. To New Mexico’s north is Colorado, one of the first states to legalize for adult use.
Cannabis is also expected to be legalized across the southern border in Mexico, with lawmakers facing a Supreme Court mandate to end prohibition by the end of April.
Before last year’s failed effort, New Mexico’s House in 2019 approved a legalization bill that included provisions to put marijuana sales mostly in state-run stores, but that measure died in the Senate. Later that year, Lujan Grisham created a working group to study cannabis legalization and issue recommendations.
In May of last year, the governor signaled she was considering actively campaigning against lawmakers who blocked her legalization bill in 2020. She also said that she’s open to letting voters decide on the policy change via a ballot referendum if lawmakers can’t send a legalization bill to her desk.
Top IRS Official Says Marijuana Banking Reform Would Help Feds ‘Get Paid’
The Internal Revenue Service (IRS) would like to get paid—and it’d help if the marijuana industry had access to banks like companies in other legal markets, an official with the federal department said. She also talked about unique issues related to federal tax deductions for cannabis businesses.
At an event hosted by UCLA’s Annual Tax Controversy Institute on Thursday, IRS’s Cassidy Collins talked about the “special type of collection challenge” that the agency faces when it comes to working with cannabis businesses while the product remains federally illegal.
While IRS isn’t taking a stand on federal marijuana policy, Collins said that the status quo leaves many cannabis businesses operating on a cash-only basis, creating complications for the agency, in part by making it harder for banks to “pay us.”
“The reason why [the marijuana industry is] cash intensive is twofold,” she said. “Number one, a lot of customers don’t want a paper trail showing that they’re buying marijuana, and number two, the hesitancy of banks to allow marijuana businesses to even bank with them.”
Of course, the reason why many financial institutions remain hesitant to take on cannabis companies as clients is because the plant is a strictly controlled substance under federal law.
“There’s been a number of legislative bills that have been introduced—and I am definitely not expressing any opinion personally or on behalf of the IRS about any pending or proposed legislation,” Collins, who is a senior counsel in the IRS Office of Chief Counsel, said. “But it is interesting to note that, if the law changed so that the marijuana businesses could have banks, that would make the IRS’s job to collect [taxes] a lot easier. As part of collection, we want the money. That’s our end goal there.”
A major part of what makes cannabis businesses unique is that they don’t qualify for traditional tax credits under an IRS code known as 280E. That policy “prohibits them from claiming deductions for business expenses because they’re technically being involved in drug trafficking,” Collins explained at the event, from which small excerpts of her comments were reported by Bloomberg.
There are some options available to lessen the burden on marijuana firms, however. At the end of the day, “IRS will work with marijuana companies because, again, we want to get paid,” Collins said.
One of the ways the agency works with marijuana business operators is to have them visit designated IRS “tax assistance centers” that accept cash payments in excess of $50,000. But the official warned businesses to “be prepared to be there for a little while” as the center checks—and double checks—the amount of cash being submitted.
“Revenue officers will assist the marijuana companies in paying us,” she said.
IRS officials could also help cannabis firms by having officials accompany them “to the bank in order to try to help the taxpayer secure a cashier’s payment to pay the IRS, as well as using money orders,” she said, adding that “our revenue officers are are wanting to work with the marijuana companies to help assist them to pay us.”
“When the revenue officers are there in person with the taxpayer, that could potentially help increase the likelihood that the bank will cooperate and help the taxpayer transition into a cashier’s check,” she continued. “And that has been a trend since this first became legal [at the state level], that more and more banks are allowing cannabis companies to bank with them.”
In a report published earlier this year, congressional researchers examined tax policies and restrictions for the marijuana industry—and how those could change if any number of federal reform bills are enacted.
IRS, for its part, said last month that it expects the cannabis market to continue to grow, and it offered some tips to businesses on staying compliant with taxes while the plant remains federally prohibited.
As it stands, banks and credit unions are operating under 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) that lays out reporting requirements for those that choose to service the marijuana industry.
Leaders in both chambers of Congress are working on legalization bills to end federal marijuana prohibition. But stakeholders are hopeful that, in the interim, legislators will enact modest marijuana banking reform. Legislation to protect financial institutions from being penalized for working with cannabis businesses passed the House for the fifth time last month.
Rodney Hood, a board member of the National Credit Union Administration, wrote in a Marijuana Moment op-ed this month that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications.
IRS separately hosted a forum in August dedicated to tax policy for marijuana businesses and cryptocurrency.
Earlier this year, IRS Commissioner Charles Rettig told Congress that the agency would “prefer” for state-legal marijuana businesses to be able to pay taxes electronically, as the current largely cash-based system under federal cannabis prohibition is onerous and presents risks to workers.
Former Treasury Secretary Steven Mnuchin said in 2019 that he’d like to see Congress approve legislation resolving the cannabis banking issue and he pointed to the fact that IRS has had to build “cash rooms” to deposit taxes from those businesses as an example of the problem.
IRS released updated guidance on tax policy for the marijuana industry last year, including instructions on how cannabis businesses that don’t have access to bank accounts can pay their tax bills using large amounts of cash.
The update appears to be responsive to a Treasury Department internal watchdog report that was released earlier in the year. The department’s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to “develop and publicize guidance specific to the marijuana industry.”
Luxembourg Set To Become First European Country To Legalize Marijuana Following Government Recommendation
Luxembourg is poised to become the first European country to legalize marijuana, with key government agencies putting forward a plan to allow the possession and cultivation of cannabis for personal use.
The ministers of justice and homeland security on Friday unveiled the proposal, which will still require a vote in the Parliament but is expected to pass. It’s part of a broader package of reform measures the agencies are recommending.
Under the marijuana measure, adults 18 and older could grow up to four plants. However, under the non-commercial model that is being proposed, possessing more than three grams in public would still be a civil offense, carrying a fine of €25-500 ($29-581). Currently, the maximum fine for possession is €2,500 ($2,908).
In terms of access, adults would be able to buy and trade cannabis seeds for their home garden.
Justice Minister Sam Tamson said the government felt it “had to act” and characterized the home cultivation policy change as a first step, The Guardian reported.
👉🏻élaboration du projet de loi usage privé du #cannabis : jusqu’à 4 plantes à domicile & décorrectionnalisation <3g
👉🏻renforcement de la prévention & de l’accompagnement
👉🏻⬆️des moyens de la police
👉🏻élaboration d’un projet de production/vente #Luxembourg pic.twitter.com/8yre0Udt8J
— Sam Tanson (@SamTanson) October 22, 2021
“The idea is that a consumer is not in an illegal situation if he consumes cannabis and that we don’t support the whole illegal chain from production to transportation to selling where there is a lot of misery attached,” he said. “We want to do everything we can to get more and more away from the illegal black market.”
While limited in scope, the reform would make Luxembourg the first country in Europe to legalize the production and possession of marijuana for recreational use. Cannabis has been widely decriminalized in certain countries in the continent, but it has remained criminalized by statute.
Government sources in Luxembourg told The Guardian that plans are in the works to develop a program where the state regulates the production and distribution of marijuana. Tamson said they are working to resolve “international constraints” before taking that step, however, referring to United Nations treaty obligations that multiple U.S. states and other countries like Canada and Uruguay have openly flouted.
The measures include:
🟢 Regulation of cannabis use and cultivation: adults will be able to legally cultivate up to four cannabis plants for their own use, provided the cultivation is happening at their place of residence.
— European Greens (@europeangreens) October 22, 2021
For now, the country is focusing on legalization within a home setting. Parliament is expected to vote on the proposal in early 2022, and the ruling parties are friendly to the reform.
This has been a long time coming, as a coalition of major parties of Luxembourg agreed in 2018 to enact legislation allowing “the exemption from punishment or even legalization” of cannabis.
Meanwhile in the U.S., congressional lawmakers are working to advance legalization legislation. A key House committee recently approved a bill to end marijuana prohibition, and Senate leadership is finalizing a separate reform proposal.
In Mexico, a top Senator said this week that lawmakers could advance legislation to regulate marijuana in the coming weeks. The Supreme Court has already ruled that adults cannot be criminalized over possession or cultivation, but there’s currently no program in place to provide access.
Photo courtesy of Mike Latimer.
New Bipartisan Marijuana Research Bill In Congress Would Let Scientists Study Dispensary Products
A bipartisan group of federal lawmakers introduced a bill on Thursday to remove barriers to conducting research on marijuana, including by allowing scientists to access cannabis from state-legal dispensaries.
The Medical Marijuana Research Act, filed by the unlikely duo of pro-legalization Rep. Earl Blumenauer (D-OR) and prohibitionist Rep. Andy Harris (R-MD), would streamline the process for researchers to apply and get approved to study cannabis and set clear deadlines on federal agencies to act on their applications.
“Congress is hopelessly behind the American people on cannabis, and the quality of our research shows why that is an urgent problem,” Blumenauer told Marijuana Moment. “Despite the fact that 99 percent of Americans live in a state that has legalized some form of cannabis, federal law is still hamstringing researchers’ ability to study the full range of health benefits offered by cannabis, and to learn more about the products readily available to consumers.”
“It’s outrageous that we are outsourcing leadership in that research to Israel, the United Kingdom, Canada, and others. It’s time to change the system,” he said.
Late last year, the House approved an identical version of the cannabis science legislation. Days later, the Senate passed a similar bill but nothing ended up getting to the president’s desk by the end of the last Congress. Earlier this year, a bipartisan group of senators refiled their marijuana research measure for the current 117th Congress.
Meanwhile, lawmakers are also advancing a separate strategy to open up dispensary cannabis to researchers. Large-scale infrastructure legislation that has passed both chambers in differing forms and which is pending final action contains provisions aimed at allowing researchers to study the actual marijuana that consumers are purchasing from state-legal businesses instead of having to use only government-grown cannabis.
The new bill filed this week by Blumenauer and Harris, along with six other original cosponsors, would also make it easier for scientists to modify their research protocols without having to seek federal approval.
Marijuana Moment is already tracking more than 1,200 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
It would additionally mandate that the Drug Enforcement Administration (DEA) license more growers and make it so there would be no limit on the number of additional entities that can be registered to cultivate marijuana for research purposes. It would also require the U.S. Department of Health and Human Services (HHS) to submit a report to Congress within five years after enactment to overview the results of federal cannabis studies and recommend whether they warrant marijuana’s rescheduling under federal law.
“The cannabis laws in this country are broken, including our laws that govern cannabis research,” Blumenauer said in remarks in the Congressional Record. “Because cannabis is a Schedule I substance, researchers must jump through hoops and comply with onerous requirements just to do basic research on the medical potential of the plant.”
The new legislation will “both streamline the often-duplicative licensure process for researchers seeking to conduct cannabis research and facilitate access to an increased supply of higher quality medical grade cannabis for research purposes,” he said, adding that expanded studies will help make sure “Americans have adequate access to potentially transformative medicines and treatments.”
For half a century, researchers have only been able to study marijuana grown at a single federally approved facility at the University of Mississippi, but they have complained that it is difficult to obtain the product and that it is of low quality. Indeed, one study showed that the government cannabis is more similar to hemp than to the marijuana that consumers actually use in the real world.
There’s been bipartisan agreement that DEA has inhibited cannabis research by being slow to follow through on approving additional marijuana manufacturers beyond the Mississippi operation, despite earlier pledges to do so.
In May, the agency finally said it was ready to begin licensing new cannabis cultivators. Last week, DEA proposed a large increase in the amount of marijuana—and psychedelics such as psilocybin, LSD, MDMA and mescaline—that it wants produced in the U.S. for research purposes next year.
Under the new House bill, the agency would be forced to start approving additional cultivation applications for study purposes within one year of the legislation’s enactment.
HHS and the attorney general would be required under the bill to create a process for marijuana manufacturers and distributors to supply researchers with cannabis from dispensaries. They would have one year after enactment to develop that procedure, and would have to start meeting to work on it within 60 days of the bill’s passage.
In general, the legislation would also establish a simplified registration process for researchers interested in studying cannabis, in part by reducing approval wait times, minimizing costly security requirements and eliminating additional layers of protocol review.
Read the full text of the new marijuana research bill below: