Cannabis advocates in New Mexico have been focusing on the potential economic windfall that the U.S. state stands to receive if weed is legalized and taxed.

Currently, weed still infiltrates the black market. If those illicitly traded products were legalized and taxed, the economy could be bolstered significantly.  The sponsors of a bill to legalize cannabis in New Mexico are hoping that the imposed tax will be as small as possible.

House Bill 356, known as the “Cannabis Regulation Act,” is co-sponsored by Albuquerque-based Democrat Rep. Javier Martinez.

“Our goal was to stay under 20 percent,” said Martinez.

Details of New Mexico’s legal cannabis bill

Under the proposed details of New Mexico’s legal cannabis bill, an excise tax of 9 percent would be imposed on cannabis sales. On top of that, local governments would have the opportunity to impose an additional three percent tax on cannabis in New Mexico. Let’s not forget about local gross receipts taxes, either.

It might not seem so significant when compared to legal cannabis markets that have charged higher taxes. Notwithstanding, the goal of legal weed in New Mexico is to drive down costs for consumers. Failure to do so could not only hinder the legal market but also, push consumers in the direction of cheaper bud from the illicit black market.

Data suggests lucrative prospects associated with cannabis legalization in New Mexico. Based on a fresh analysis published by the state Taxation and Revenue Department, the passing of House Bill 356 could yield annual revenue in the range of $19 million to $34 million between 2021 and 2023.

In addition to this, the department’s analysis revealed how a further $22 million could be harvested by county and municipal governments by the year 2023.

What will the money from legal cannabis in New Mexico be used for?

Individuals living in communities whereby state and federal drug policies have previously failed them stand to benefit from New Mexico’s legal cannabis bill. A big chunk of the funds raised by the state of New Mexico, if House Bill 356 passes, would be dedicated to the general fund.

Approximately 20 percent of the raised funds would be poured into a Department of Health fund. This would aid affected individuals with an opportunity to gain access to job placements, as well as treatment options for mental health and substance abuse.

On top of that, 14 percent of the tax revenue earned by means of House Bill 356 passing would support public education campaigns to deter youths from driving under the influence. A portion of that 14 percent would be allocated for medical and recreational cannabis-focused research.

The sole purpose of this research is to determine the efficacy of combatting substance abuse disorder by natural means, such as with cannabis. A DWI program may also receive a portion of the funding.

The measure to legalize cannabis in New Mexico will advance without amendments after the House Health and Human Services Committee voted 5-2. Suggestions for changes have been mentioned by the co-sponsors of New Mexico’s cannabis bill, however. Now, it will be put before the House Judiciary Committee.