In mid-September, Gov. Michelle Lujan Grisham requested that the federal government contribute more financial assistance to help New Mexico recover from a coronavirus-related revenue glut. 

Something that Grisham says could help resolve the state’s budget deficit is cannabis legalization. However, for this to be possible, experts say that lawmakers must act quickly. 

Aside from making sure that product demand is met, legislators have been informed that they must impose limits on daily cannabis purchases for customers. Furthermore, if cannabis legalization in New Mexico is to transpire, a sufficient sales tax in the range of 15-20 percent must be applied to state-regulated products.

Cannabis legalization in New Mexico could help reverse economic damage caused by COVID-19

The 2022 budget has suffered a serious blow due to the coronavirus (COVID-19) pandemic. Fortunately, if Gov. Grisham is correct in her predictions, cannabis legalization in New Mexico could boost sales by $600 million annually and help to diversify the economy. 

Should the sales revenue meet projections, a 15-20 percent tax rate could yield as much as $90 to $100 million in tax revenue. In order to accomplish this, CEO and President of Ultra Health Inc. – the state’s largest medical cannabis producer – Duke Rodriguez told members of the Revenue Stabilization and Tax Policy Committee that timing is of the utmost importance.

According to Grisham’s testimony for the U.S. House Financial Services Committee, failure to deal with sinking revenues and reduced oil production caused by the coronavirus outbreak could make it difficult for the state to provide adequate services to residents, such as child welfare, education, health care and small-business support.

Cannabis legalization in New Mexico could create 15,000 jobs

Rodriguez, who recently gleaned insights from an economic analysis of prospective cannabis legalization in New Mexico –  of which was carried out by financial consultant Kelly O’Donnell – says that as many as 15,000 jobs could be created if a law is passed.

“The governor’s position on the importance of recreational cannabis as an economic game-changer for our state hasn’t changed,” Grisham’s spokesman, Tripp Stelnicki, wrote in an email. “If there’s an opportunity here for our administration to deliver hundreds of millions in new revenue to New Mexico and invest in tens of thousands of new jobs – and there is – we’re going to pursue it.”

Notwithstanding the promising insights, it remains uncertain as to whether or not the issue of legalization will be contemplated during the 2021 legislative session. Efforts were made to address the issue at the regular 2020 legislative session, when the House of Representatives passed a legal cannabis bill with a vote of 36-34. However, opposition from Democrats and Republicans led to the bill dying in a Senate committee.

On the plus side, Grisham stands by her views on the economic benefits that could be garnered from cannabis legalization in New Mexico. Moreover, virus numbers have been dropping consistently across the state, where approximately 4,896 tests are being carried out on a daily basis.