Harris Sliwoski: New Mexico’s Cannabis Legislation: Key Bills to Watch

The New Mexico legislature is considering several bills that address the state’s cannabis industry. With a two-month session held only every other year, there is an opportunity for meaningful changes aimed at strengthening the industry. Among the many bills under consideration, four stand out for their potential impact– both for industry and for consumers seeking high-quality, regulated cannabis products.

HB 10 – Cannabis Enforcement and Oversight

HB 10 is a bipartisan bill, supported by Governor Michelle Lujan Grisham. It addresses a key challenge: the inability of the Cannabis Control Division (CCD) to effectively manage the growing number of operators in New Mexico who are in violation of the Cannabis Act. This bill proposes the creation of an Enforcement Bureau within the CCD, granting it powers to investigate and act on suspected violations. Key powers include:
  • Conducting lawful searches of cannabis facilities;
  • Upon issuance of a warrant, taking control of a premises where cannabis is located;
  • Taking cannabis samples for testing;
  • Confiscating suspected adulterated, dangerous, misbranded, or violative products;
  • Destroying products pursuant to applicable law;
  • Issuing a recall order for certain cannabis products; and
  • Arresting violators.
Licensees facing enforcement actions would have 10 days to request an administrative hearing. If found in violation, the CCD would have the authority to impose penalties, including:
  • License suspension or revocation
  • Fines up to $10,000 per violation
  • Additional disciplinary actions as authorized by the Cannabis Act
HB 10 passed the House Commerce and Economic Development Committee. It is now under consideration by the House Judiciary Committee, before going to a full floor vote. If passed, it would take effect on July 1, 2025.

HB 112 – Strengthening Cannabis Licensure

HB 112 amends the Cannabis Act by increasing criminal background check requirements on applicants. Under the bill, both state and federal criminal background checks will be required for CCD applicants. (Currently, only a state report is required.) This bill also mandates that the CCD receive and maintain these background reports. HB 112 is currently under review by the House Commerce & Economic Development Committee.

HB 346 – Regulation of Hemp Products and Synthetic Cannabinoids

HB 346 amends the state’s hemp laws to address a regulatory chasm concerning finished hemp products. Among the amendments, the bill would:
  • Expand the definition of “Hemp Finished Products” to include products intended for human ingestion, absorption, or inhalation;
  • Define and ban “Semi-Synthetic” and “Synthetic Cannabinoids” in Hemp Finished Products; and
  • Create the definition, and require regulation, of “Hemp Retailer”.
This bill requires the Department of Environment and the Environmental Improvement Board to establish rules for the manufacturing and retail sale of hemp products, including requirements for labeling, licensing, and recordkeeping. Additionally, hemp products will be subject to state food laws. HB 346 is currently with the House Commerce & Economic Development Committee for review.

SB 89 – Repealing Cannabis Tax Increases

SB 89 takes a simple but important step: it repeals the incremental tax increases laid out in the Cannabis Act. Tax increases are set to start after July 1, 2025. The bill would keep the cannabis excise tax at its current rate of 12%, rather than gradually raising it over the next five years:
  • 13% after July 1, 2025
  • 14% after July 1, 2026
  • 15% after July 1, 2027
  • 16% after July 1, 2028
  • 17% after July 1, 2029
  • 18% after July 1, 2030
The bill is currently in the Senate Tax, Business, and Transportation Committee for review.

Conclusion

While HB 112 and SB 89 focus on administrative changes, HB 10 and HB 346 have the potential to significantly reshape enforcement and regulation in both New Mexico’s marijuana and hemp industries. If these bills pass, operators in both sectors will need to revisit their operating procedures to ensure full compliance with New Mexico’s cannabis laws. As a licensed New Mexico attorney with years of experience in the cannabis and hemp industries, I am available for free consultations to help operators navigate these changes. If you’re a current New Mexico operator or interested in entering the industry, feel free to reach out.

Jason Adelstone