The New Mexico Legislature passed House Bill 2 (“HB 2”) on March 31, 2021. Governor Lujan Grisham (D-NM) noted that her “signing pen” was ready for HB 2, also known as the Cannabis Regulation Act. The Governor had convened a special session of the Legislature for the purpose of passing the bill, which failed to pass in time during the regular session.

The Cannabis Regulation Act legalizes recreational (or “adult-use”) marijuana throughout New Mexico, with retail sales expected to begin by April 2022. New Mexico is poised to become the 17th state to legalize recreational marijuana, following in the footsteps of New York, which also recently legalized marijuana. The newly-established Cannabis Control Division will oversee regulation of the cannabis industry in New Mexico, which is projected to yield upwards of $30 million in state and local revenue in 2023.

Pretty soon New Mexicans twenty-one years and older will be able to legally possess up to 2 ounces of cannabis (as well as up to 16 grams of cannabis extract and 800 milligrams of edible cannabis). Unlike other states, which have legalized marijuana without providing a venue for legally consuming cannabis (besides one’s private residence), New Mexico plans to introduce “cannabis consumption areas,” more popularly known as cannabis lounges.

The Cannabis Regulation Act ensures that medical marijuana users will not be disadvantaged once recreational sales begin. The bill allows the Cannabis Control Division to take a variety of actions to address supply shortages for medical users, including the imposition of mandatory production quotas. Additionally, the bill prioritizes opportunities in the cannabis industry for rural New Mexicans and small-scale producers. Although much remains to be seen with respect to the bill’s implementation, New Mexico regulators have already started building out the regulatory framework, and seem poised to ramp up the state’s cannabis industry going into 2022.