The governor of New Mexico says she’s “very sad” for not legalizing cannabis this year because tax revenues could have mitigated some of the economic damage caused by the pandemic.
During a public address last week, Gov. Michelle Lujan Grisham was asked how New Mexico would handle the financial shortfalls created by COVID-19. While her answer focused on working out new deals with the embattled oil and gas sector, which make up a large chunk of her state’s budget, she also voiced regret that the state wouldn’t see revenues from a recreational weed market this year.
“If there was ever a time for wishful thinking, I wish we had passed recreational cannabis because that would be US$100 million,” Gov. Michelle Lujan Grisham said. “Now, that was before COVID-19. [But] that would be US$100 million in the budget, and I’m very sad about that.”
While New Mexico’s Democrat-led House passed a bill for recreational legalization last March, the measure ended up being stalled by the Senate Finance Committee before the close of the state’s short 30-day legislative session.
However, the Sante Fe Reporter was first to note the US$100 million that Lujan Grisham was referencing was based off figures from a mature cannabis market. If the legalization bill became law, the first recreational sales wouldn’t have started until July 1 at the earliest.
Last year, Lujan Grisham formed a panel of experts called the Cannabis Legalization Working Group to develop a new legalization plan.
The idea was to build a thriving recreational market on top of New Mexico’s already existing medical market, which had been established in 2007 when the state first legalized medical cannabis.
The working group concluded that the combined markets would employ more than 13,000 workers and generate US$850 million in annual sales. And legalization could earn almost US$100 million in tax revenue for state and local governments each year. However, those estimates were based on the fifth year of sales once the new market stabilized.
Despite the governor’s revenue figure discrepancy, U.S. cannabis policy experts expect that legalization will become increasingly attractive over the next year as states grapple with pandemic-related budget shortfalls.
Chris Lindsey with the Marijuana Policy Project said he expects state-level legalization efforts will accelerate, but not until 2021. That’s because most legislature sessions are currently cancelled while states grapple with the spread of COVID-19.
Legal cannabis sales grew 37 per cent year-over-year in America to reach US$12.3 billion in 2019, according to new data published by BDS Analytics.
Top image of The New Mexico State Capitol, located in Santa Fe via Deposit Photos