During a special 2021 legislative session called by embattled Gov. Michelle Lujan Grisham, Democrats rammed through their extreme marijuana bill despite health, safety, and economic concerns raised by New Mexicans. One main argument against legalizing the contraband substance, which is still registered as a Schedule 1 narcotic federally, is that its economic impacts would be meager while increased law enforcement and administrative costs associated with implementation would make it financially useless.
At the time, the Piñon Post made clear that this bill, if implemented, would not even be a drop in the bucket for the state budget, which the Governor desperately wants to be oil and gas-free. In March, we wrote, “Weed, no matter if it passes or not, won’t make the slightest difference in the state’s budget, but Gov. Lujan Grisham sure wants to make New Mexico dependent on drug money–either by 20% taxed dope through her plan–or on the streets through contraband merchants of the product.”
We reported the following:
According to that leftist legal recreational pot plan’s fiscal impact report, New Mexico would take in at most $15.1 million in revenue after years of losses to implement the program.
For context, the MOST such a revenue plan would generate in revenue wold be 0.204% of the needed funds to plug the gaping hole in Gov. Lujan Grisham’s budget.
The oil and gas industry, in contrast, generated $2.8 billion directly to the state general fund in fiscal year 2020. That is approximately 37% of the state’s budget coming from oil and gas.
In states that have already legalized adult-use marijuana, the largest of them being California, the state only brought in a total of $1.5 billion since 2018. The state’s budget is approximately $202 billion.
Now, far-left publications, including the Santa Fe New Mexican, are finally agreeing with the cautionary assessment made by many before the passage of the radical bill.
On Monday, the New Mexican quoted multiple people in the economic community who said much of the same. Marijuana “will not replace oil or gas,” Sarah Stith, an assistant professor of economics at the University of New Mexico told the paper.
“A lot of [recreational marijuana] revenue is dependent on tourism and consumers’ willingness to pay given the added cost of the tax,” Ismael Torres, senior economist for the Legislative Finance Committee, was quoted. Torres was speaking about the 12% tax on marijuana which the radical Governor’s bill will implement in combination with local taxes (such as in Santa Fe, which is 8.4375%, feeding the black market’s market share due to 20% taxed pot.
The Legislative Finance Committee in a March fiscal impact report predicted the first full fiscal year of recreational marijuana sales starting in July 2022 would produce an estimated $19.1 million in net tax revenue for the state and $9.4 million for local governments. Fiscal year 2023-24 could see $30.1 million in net state tax revenue and $15.1 million for local governments.
“Legal, homegrown marijuana and continuing black market sales could take further bites from taxable sales, Stith added,” the report said.
“There could be a substantial impact to revenues if more medical-use licenses are sought to avoid the cost of taxes or if medical users begin to purchase cannabis recreationally as accessibility grows,” Torres added. “Shifts between recreational and medical cannabis is a big, unanswered question for us.”
“There will be a lot of supply, but will there be the demand?” James Wheeler, owner of Commercial Properties Inc. in Santa Fe said. “One of my clients said 90 percent of novices going into this are going to fail.”
But the Governor did not pay attention to the economically catastrophic results of marijuana implementation in New Mexico. She did whatever necessary to fulfill her campaign promise to her far-left supporters of “legal weed” — no matter the cost. She said that she would “not take no for an answer” and refused to wait until the next legislative session for a more digestible bill.
Lujan Grisham took tens of thousands of dollars from the Big Pot lobby, including tens of thousands of dollars from Darren White of PurLife and others. Many state legislators also took cash from the Big Pot lobby.