New Mexico legalized recreational cannabis in 2021 with intentions to support communities disproportionately harmed by its criminalization. Sales opened last year and a bill now moving through the Legislature aims to finally funnel some of the tax revenue into local health and equity work.
Democratic Rep. Janelle Anyanonu, filling in for bill sponsors Democratic Rep. Andrea Romero and Speaker of the House Javier Martínez, told lawmakers on the Government, Elections and Indian Affairs Committee during its first hearing Wednesday that these appropriations were stripped out of the legalization bill because it was unclear how much money the new industry would bring in.
“But now that we’ve had a very successful run of cannabis sales, we can make good on the original promise to fund those programs,” she said.
Beginning last April, the 12% cannabis excise tax brought in an average of $2.6 million per month in 2022, according to Taxation and Revenue Department data. The tax is set to gradually increase beginning July 1, 2025, eventually hitting 18% by July 1, 2030. About a third of that revenue would be split evenly between two new funds under House Bill 315.
One of them, run by the Department of Health, would focus on reinvesting in communities through public health initiatives, education and research. The other, under the Health and Human Services Department, would help fund substance use prevention and treatment programs. Public schools and local governments would be eligible to apply for the grants.
The way the bill is written is causing some confusion, making it appear the funds would chip away at existing 33% distributions to local governments for sales that occur in their jurisdictions. The Legislative Finance Committee flagged the issue in its fiscal impact reportand it doesn’t appear to be the bill’s intent. Expert witness Emily Kaltenbach with the Drug Policy Alliance told committee members in the sponsors’ absence that the bill language should be amended to reflect that the funds would only reduce the state’s revenue.
“The impact is acutely felt at a community level and that was the intent of this bill — really to support communities,” she said.
Republican Rep. Martin Zamora of Clovis supported the bill, but expressed hope that rural communities would be assisted in applying for the grants.
“We don’t have accountants, we don’t have lawyers, we don’t have grant writers,” he said. “It’s just a big issue in small communities. And they don’t know how to access these funds and they just fall further and further behind as we go.”
Kaltenbach said it was an important point and that, while the bill doesn’t explicitly provide for grant writers, she hoped the programs set up at DOH and HHS would include application support.
“These are the communities that have been harmed,” she said. “They’re the ones that should be supported in getting these funds back into their community.”
The bill passed unanimously 10-0 and now heads to the House Appropriations & Finance Committee before a possible vote by the full House.