Cannabis could bring new funds, challenges to Santa Fe

It appears New Mexico is primed to get its share of the so-called green rush.

While a movement to legalize cannabis for recreational adult use has been gaining steam for years, proponents believe a bill is likely to reach the desk of Gov. Michelle Lujan Grisham, who supports the effort, during the current legislative session.

What would legalized cannabis mean for Santa Fe?

While the city would stand to see an increase in tax revenues and job creation through legalization, it also would have to contend with zoning changes and develop strategies for law enforcement to detect drivers impaired by marijuana.

Much depends on what legislation is approved. Each of several bills introduced in the Legislature has its own framework for a legalization, including the potential for local municipalities to impose taxes.

Legislation with the most momentum, House Bill 12, passed the House floor Friday and moved to the Senate. If that bill was signed into law, recreational sales would begin Jan. 1.

The bill would allow for a 20.4 percent tax ceiling on cannabis, with a state excise tax of 8 percent. Local governments could impose taxes up to 4 percent. According to some estimates, the bill would generate around $24 million a year for some local governments and $44 million for the state, though a fiscal impact report put the figures closer to $15 million for the state and $8 million for local governments.

Emily Kaltenbach, state director of the Drug Policy Alliance, which backs HB 12, said cities and counties shouldn’t expect to make a windfall on cannabis, but legalization could mean more money for cash-strapped programs.

“There is a huge benefit to local jurisdictions to legalization because they will receive additional funding that they have not received in the past and the freedom to use them in whatever way they see as useful in their communities,” she said.

Santa Fe City Councilor Signe Lindell said the prospect of more funds during a period when the city is dealing with lost revenue during the coronavirus pandemic is an attractive proposition.

“We have plenty of places to spend it,” Lindell said. “We have a hole to dig out of. I hope those are discussions we can have.”

Councilor Michael Garcia said he doesn’t expect the city to see a massive revenue increase from recreational cannabis, but thinks officials need to begin discussing where the city should invest any potential revenue.

He tossed out ideas like affordable housing, substance abuse prevention and mental health programs as possible landing spots for funds.

“We want to look at the revenues closely and strategically,” Garcia said. “Where will it have the most impact?”

Affordable housing is an area Councilor JoAnne Vigil Coppler also would like to see explored if cannabis is legalized.

“I think it would be a good healthy cash flow,” Vigil Coppler said. “We’ll have to think about: Where are our needs, where does the money need to be best put to use and what are the city’s issues?”

Kaltenbach said she sees legalization as an opportunity to help address the impact of cannabis prohibition on disadvantaged communities.

“Legalization not only needs to fix the present and the future, but also repair the harm from the past,” Kaltenbach said.

While the taxes gained would be a big get, Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, which backs House Bill 17, a bill that has been tabled by a House committee, said another factor for cities to consider is the business opportunities the cannabis industry would spawn.

Legalization is expected to generate 11,000 jobs across the state directly tied to cannabis, but Lewinger expects it would create far more jobs, which he said could drive additional revenue to cities and business owners.

“All of this adjacent cannabis-related infrastructure is going to have the ability to grow in this new industry, doing the business they already do, just in a new industry,” Lewinger said.

Construction companies, marketing firms and agriculture-related businesses could find new clientele in a budding cannabis industry, Lewinger said.

Len Goodman was one of the first New Mexicans to receive a license to produce medical cannabis in 2007, and he said he expects more dispensaries to spring up across the city after legalization. But whether those dispensaries could survive the long haul remains a question mark.

Currently, about 12 medical dispensaries are spread across Santa Fe, with another three in the pipeline, which Goodman said is probably already more than the city can support.

“That is the nature of the free market,” Goodman said. “More stores want to open up. It’s going to push people out of the business. Some will do well; some will do worse. The only potential control is from a zoning perspective.”

Lewinger agreed, noting the control for cities largely is how they approach zoning to steer where recreational cannabis businesses can open.

“There is a lot of local control through local zoning ordinances,” Lewinger said.

Lindell said the city has a “fair amount of work ahead of it,” on working out a zoning plan if recreational cannabis is legalized.

“Of course, we don’t have anything in the current code,” Lindell said. “That will be a whole new issue. It will require a fair amount of discussion.”

A study hasn’t been completed on how the city might approach recreational cannabis, but one should be done in the future if a bill is signed into law, said Councilor Chris Rivera.

“I try to look at everything from a broad perspective,” Rivera said. “On the economic side, it’s clearly going to benefit the city to have that extra income coming in. On the bad side, we don’t know what the effects on the public would be driving. How many people would be using it.

“It would still be illegal at the federal level, which has caused some issues in Colorado.”

Santa Fe County Sheriff Adan Mendoza shares similar concerns. He said his chief question is how recreational cannabis might impact the rates of people driving while intoxicated. He noted there are no tools to accurately determine whether a driver is under the influence of marijuana.

“Alcohol, they have machines. You can do things like roadside tests,” Mendoza said. “I would hope that those issues would all be ironed out before they put the cart before the horse, so to speak.”

There also is no standard level of impairment for marijuana, as opposed to alcohol, which has a set blood-alcohol content drivers are prohibited from exceeding or face charges.

Mendoza said there is drug detection training for law enforcement, but offering such training to an entire force comes at a high cost.

“It’s a difficult science, so it’s not something you can just train a whole police force on,” Mendoza said. “It’s not fiscally possible to do that.”

The Santa Fe Police Department declined to comment.

Garcia said his main focus is to make sure Santa Fe approaches a potential new cannabis industry in a safe manner.

“I think it’s a step in the right direction,” Garcia said. “What needs to be ensured is that should cannabis be legalized, it’s practiced in a safe manner.”

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