By: Douglas R. Sargent, Partner and David Standa, Partner
This week, New Mexico released finalized rules for cannabis producers and began accepting applications for cannabis producer licenses. This is an important step towards the commencement of legal retail sales, which is slated for no later than April 1, 2022. Below is a summary of the rules and application for producers, as well as information on forthcoming rules and applications for other licenses.
The newly released rules—which do not differ significantly from the proposed rules issued last month—cover a wide range of issues, including operational requirements, security measures, product recall, chain of custody, transportation of cannabis, disposition of cannabis waste, quality assurance, and the state’s monitoring of licensees. Not surprisingly, the rules also have a social equity component. Specifically, the Cannabis Control Division must “adopt procedures to promote and encourage full participation in the cannabis industry of representatives of communities that have disproportionately been harmed by rates of arrest through the enforcement of cannabis prohibitions and encourage racial, ethnic, gender, geographic diversity, and New Mexico residency among license applicants, licensees and cannabis industry employees.” The Division has established a goal that half of applicants, licensees, and cannabis industry employees will come from those groups plus rural communities that will likely be impacted by cannabis production.
Unlike many other states, New Mexico will utilize an online application portal, which is now up and running. The rules establish numerous requirements for those applying for cannabis producer licenses, including:
Proof that the applicant or individuals controlling the applicant are 21 years or older;
Diagram and description of the location of the land or facility to be used, as well as documentation establishing the applicant’s ownership of legal authority to use the property;
Description of the method(s) to be used to produce cannabis;
Demonstration of a legal right to use the quantity of water needed for cannabis production;
Information regarding all persons controlling the applicant, including criminal history;
Summary of proposed operations; and
Plan to address the state’s social and economic equity goals.
Once an applicant submits its application, along with the required application fee, the Division will have 90 days to approve or deny the application. Preparing and submitting the application will only be half the battle in New Mexico with the other half being obtaining approval at the local level to operate a cannabis production facility. Similar to Michigan, municipalities in New Mexico can pass ordinances regulating how many production facilities operate within their borders as well as where those facilities can be located.
The next step for the Division is to issue rules and begin accepting applications for the remaining licenses, including retail licenses. The deadline for the Department to begin accepting and processing the non-producer licenses is January 1, 2022, so we expect that to happen in late-December, although we’re hopeful it happens sooner.
If you have any questions or need assistance applying for cannabis licenses in New Mexico, please contact Doug Sargent (doug.sargent@gmlaw.com ; 773-395-1548) or David Standa (david.standa@gmlaw.com ; 773-395-1562).
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