New Mexico's SB 89: A Game Changer for Cannabis Consumers in El Paso
Introduction
The cannabis industry in New Mexico has been rapidly evolving since the state legalized recreational use in 2021. For El Paso residents, New Mexico’s cannabis market has been a legal and convenient source for purchasing cannabis products, given that Texas continues to outlaw recreational use. However, a recent legislative proposal—Senate Bill 89 (SB 89) —could further solidify New Mexico’s role as a key player in the region's cannabis economy.
SB 89, introduced by Senator Katy Duhigg, aims to halt the planned annual increases in New Mexico's cannabis excise tax, maintaining the current rate of 12%. This move is expected to have widespread implications not only for New Mexico residents but also for the many El Pasoans who cross state lines to purchase cannabis legally. Here’s an in-depth look at what SB 89 entails and what it means for cannabis consumers in the region.
What is Senate Bill 89?
Under current New Mexico law, the state imposes a 12% excise tax on all recreational cannabis sales, which is applied in addition to the Gross Receipts Tax (GRT) that varies based on location. Initially, the excise tax was set to increase by 1% each year starting July 1, 2025, until reaching 18% by 2030.
SB 89 proposes to eliminate these scheduled increases, keeping the tax rate at a steady 12%. The bill aims to prevent potential adverse effects associated with rising taxes, such as inflated product prices, a decline in legal cannabis sales, and an increase in illicit market activity.
Why is SB 89 Important?
The logic behind SB 89 is simple: keeping taxes lower helps maintain competitive prices, ensuring the legal cannabis industry remains attractive compared to unregulated markets. Many advocates, including Ben Lewinger, Executive Director of the New Mexico Cannabis Chamber of Commerce, argue that the tax increases could discourage consumers from purchasing cannabis legally, leading them to seek cheaper alternatives from unregulated sources. By keeping the tax stable, SB 89 aims to support both consumers and businesses within the legal cannabis framework.
What This Means for El Paso Residents
El Paso residents have played a significant role in the success of New Mexico’s cannabis market. Sunland Park, NM—a city right on the Texas border—has seen a surge in dispensaries catering primarily to Texas customers. Since New Mexico legalized recreational cannabis, many El Paso residents have crossed state lines to purchase legal cannabis products, contributing to the state’s cannabis boom.
If SB 89 is enacted, it could bring several benefits and considerations for El Paso residents:
1. More Affordable Cannabis Prices
With SB 89 ensuring the excise tax remains at 12%, cannabis prices in New Mexico will remain more predictable and competitive. Had the tax increases proceeded as planned, customers would have seen gradual price hikes, potentially making legal cannabis less attractive. Stable tax rates mean that El Pasoans who rely on New Mexico’s dispensaries won’t face unexpected cost increases.
2. Sustained Cross-Border Commerce
The relationship between New Mexico’s cannabis industry and Texas consumers has been beneficial for dispensary owners near the border. A stable tax rate ensures that New Mexico businesses continue to thrive, with El Paso residents making up a significant portion of their customer base. Cities like Sunland Park are poised to maintain steady foot traffic from Texans looking for legal cannabis without the fear of rising costs.
3. The Legal Implications of Buying in New Mexico
Despite the convenience of purchasing legal cannabis in New Mexico, El Paso residents should remain aware that transporting cannabis across state lines is illegal. Texas law still classifies cannabis possession as a criminal offense, with potential legal repercussions. While SB 89 keeps prices stable, consumers must remember that federal law prohibits interstate cannabis transport, even between a legal state and an illegal one.
What’s Next for SB 89?
The bill is set to take effect on July 1, 2025, if passed by the New Mexico legislature. As discussions continue, both cannabis businesses and advocacy groups are voicing support for the bill, arguing that a fixed tax rate benefits the entire industry.
For El Paso residents, this means watching the legislative process unfold and staying informed on any changes that might affect their access to legal cannabis. While SB 89 won’t alter Texas’ cannabis laws, it does ensure that New Mexico remains a reliable, legal market for those who choose to travel across state lines for their cannabis needs.
Conclusion
SB 89 represents a crucial policy shift aimed at stabilizing the cannabis market in New Mexico. By maintaining the excise tax at 12%, the bill ensures that legal cannabis remains accessible and competitive, benefiting both businesses and consumers.
For El Paso residents, this move helps maintain a steady, affordable supply of cannabis just across the state line. However, the ongoing legal risks associated with bringing cannabis back into Texas remain unchanged. As the bill moves forward, staying informed about legislative developments will be essential for anyone involved in the cannabis community, whether as a consumer, business owner, or advocate.
At El Paso Cannabis Club, we’ll continue to track this bill and provide updates on how it affects our local community. Stay tuned for more insights on New Mexico’s cannabis industry and its impact on El Paso!
