The New Mexico Regulation and Licensing Department’s Cannabis Control Division, a new organization tasked with developing parameters for the state’s legal cannabis business, has more than doubled the maximum number of plants a farmer can produce.
Concerns that the lower restriction might lead to a supply shortfall, particularly among patients in the state’s Medical Cannabis Program, prompted the adjustment in the agency’s proposed rules for cannabis producers, which increased the ceiling to as many as 10,000 plants from 4,500.
Critics warned of a rush to buy recreational cannabis once it becomes legal, which is expected to happen in early 2022.
In New Mexico, it became legal on June 29 for persons aged 21 and up to use, cultivate, and possess small amounts of cannabis.
CCD Conducts Virtual Hearing
The Cannabis Control Division held a virtual hearing with stakeholders on a set of proposed grower rules the same day. The government upped the previously allowed plant count for producers to 8,000 in response to concerns aired at the hearing. Producers would also apply for production increases in 500-plant increments, with an absolute ceiling of 10,000.
Officials have made various changes to the proposed guidelines, including a new cap on plant counts. A public hearing on the amendments has been scheduled for August 6 at the Regulation and Licensing Department.
According to Heather Brewer, a spokeswoman for the division, “after listening to public feedback, the Cannabis Control Division saw important ways that the draft rules could be changed to better support New Mexico businesses, entrepreneurs, and consumers who are excited to participate in this new industry.”
The New Mexico Chamber of Commerce’s executive director, Ben Lewinger, praised the state’s decision to raise the plant count restriction.
“The plant count increase to 8,000 plants makes sense for New Mexico,” said Lewinger in an email sent Monday. “It’s unclear that we’ll be able to prevent a supply-constrained situation when adult-use sales begin. But, this will help to ensure that the period is brief and that the supply for medical patients is protected.”
A study conducted by the Massachusetts-based Cannabis Public Policy Consulting company also influenced the decision to increase the maximum plant count. Based on its investigations of other states that have legalized both medical and recreational cannabis, the organization estimated that New Mexico will require between 2,007 and 3,756 plants per producer during the first year of legal sales.
New Regulations For Growers
All cannabis growers must pay a $10 per plant fee, according to the Cannabis Control Division. In the first draft of the laws, larger cannabis growers would have been taxed $22 per plant.
Large-scale producers will continue to pay a $2,500 yearly charge. In contrast, micro-businesses will pay $500 to $1,000 annually, depending on their number of plants.
The Department of Regulation and Licensing has until September 1 to complete the rules for producers. Therefore, the draft rules for cannabis product manufacturing, testing, and sale have yet to be revealed.
Several participants who spoke at the meeting on June 29 raised to worry about some of the conditions for applying for a producer license, including verification of a growing facility, security measures, and water rights.
Those measures are included in the current draft.
According to New Mexico Top Organics-Ultra Health President and CEO Duke Rodriguez, increasing the limit to 10,000 plants is a step forward.
Still, Rodriguez says he believes there will be a scarcity of cannabis when retail sales begin between January 1 and April 1, 2022, “[U]nless an emergency rule is created immediately that allows major manufacturing to begin at least yesterday or earlier.”
Because of the tight schedule to get the market up and running, Rodriguez believes that all new recreational cannabis growers will wait until all the rules are passed before starting fresh growth cycles.
