EXPLAINER: What’s ahead for recreational pot in New Mexico

The start date for sales ushers in a new era for cannabis as big business with implications for law enforcement, scarce water resources, economic opportunity and cannabis tourism along the state line with Texas. Here are a few things to know.

Starting at midnight on April 1, all adults 21 and up will be allowed to buy up to 2 ounces (57 grams) of marijuana at retail outlets throughout the state. It’s enough pot to stuff a sandwich bag or roll about 60 joints or cigarettes.

The changes take effect 15 years after the state first began offering medical marijuana to help people endure afflictions including cancer, and a portion of future supplies are being reserved for cannabis patients.

Democratic Gov. Michelle Lujan Grisham and allied lawmakers hope that broad legalizing of marijuana will stamp out black markets, boost employment and provide a stable new sources of government income.

Growing pains are guaranteed as retailers stock new shelves and cannabis cultivators scale up production to meet uncertain demands that include tourists from Texas, which still mostly prohibits marijuana.

So far, the state has licensed more than 500 business premises — outdoor farms, greenhouses, retail outlets and manufacturing facilities for extracts and edibles.

The new “cannabis control” office also licenses marijuana consumption lounges and a private network of testing laboratories to ensure products are free of contaminants and to verify drug potency as listed on labels.

Already, there are 225 licensed retail outlets — though not all will open on Day 1.

“We’re going to have some nice balloons and we might get some catering,” said Logan McIlroy, a director at Hobb-based Bryan’s Green Care, a family-owned cannabis business that began business in 2015 with CBD sales.

The business spent months negotiating access to city water supplies as it prepares to stock its own cannabis stores in Hobbs, Roswell, Ruidoso and soon in Santa Teresa — a short drive from El Paso, Texas, and the U.S. border with Mexico.

Josh McCurdy, a contract grower and consultant for upstart marijuana producers, has warned wannabe pot entrepreneurs in New Mexico to be conscious of the financial risks and competitive pressures. He says he witnessed novice pot farmers going bankrupt in Oklahoma.

“They think it’s a weed, but technically its a flowering herb,” said McCurdy, owner of Knarly LLC that manages cannabis cultivation for fledgling marijuana operations including Sunland Park Cannabis Farms. “It’s not as easy as it looks to grow high-quality cannabis. It is a lot of work.”

New Mexico’s legalization laws seek to reverse some of the harm inflicted disproportionately on minority communities and poor households.

Emily Kaltenbach, a senior director at the Drug Policy Alliance that supports decriminalization of drugs, said the state hopes to help those communities gain a foothold in the industry with easy access to licensing, state subsidized loans and even product-certification logos that steer consumers toward cannabis from minority-owned businesses.

The New Mexico Finance Authority is preparing a $5 million line of credit for entrepreneurs that found cannabis micro-businesses along the lines of craft breweries, with average loan size of about $100,000.

In a sea change for law enforcement, police can no longer cite the smell of marijuana as a cause for searching vehicles or private property.

Efforts are underway to expunge cannabis infractions from criminal records that can hurt people’s prospects for employment or standing in society.

The state Department of Public Safety has identified about 155,000 instances or arrests or convictions that are eligible for automatic expungement and dismissal. Prison terms may be shortened in some instances.

Prosecutors have until July 1, 2022, to raise objections to deleting records and dismissing sanctions. Individuals can accelerate the process without paying standard court fees.

The state will levy a 12% excise tax on the sale of marijuana that eventually increases to 18%. That’s before standard taxes on sales of 5-9%.

Medical marijuana will remain tax-free for patients with qualifying medical conditions that include post-traumatic stress. More than 6% of the state population participates in the medical cannabis program.

By conservative estimates, state and local tax income from recreational cannabis will surpass $45 million annually within three years. A two-thirds share goes to the state general fund, with one-third for local governments.

Lawmakers haven’t decided yet how to spend the money.

Indoor and outdoor venues for consuming cannabis are being licensed might resemble bars or lounges. Those “cannabis consumption areas” will be licensed by the state for a fee.

Pot consumption also will be allowed in designated hotel rooms, casinos, cigar bars and tobacco stores. In other public places, marijuana consumption will be treated much like alcohol or cigarettes.

At home, hobbyists also have the right to grow up to six cannabis plants for personal consumption and 12 per household.