New Mexico’s 2025 Legislative Session Tackles Key Issues
The 2025 legislative session in New Mexico is underway, and several bills addressing the state’s evolving cannabis industry are on the table. Lawmakers are focusing on licensing regulations, employment protections, and tax policy as they shape the future of cannabis in the state. Here’s a breakdown of the key legislation introduced this session.
Senate Bill 152: Local Control Over Licensing
Sponsored by Senators Liz Stefanics, Stefani Lord, and Representative Anita Gonzales, SB 152 introduces a mechanism for counties to temporarily halt new cannabis producer licenses. Under this bill, county commissions can petition the CCD to impose a two-year moratorium on new commercial and medical production licenses.
Counties must submit their petition within ten days of approval, and the division has ten days to render a decision. If approved, no new production licenses will be issued for two years, though counties can request to lift the moratorium earlier if deemed unnecessary. This bill responds to concerns over industry oversaturation and local control in licensing.
The Debate Over a Licensing Pause: Market Stabilization or Unfair Advantage?
Opponents of the pause worry that it limits growth opportunities for micro-license holders while giving MSOs a protected market with fewer new competitors. With a freeze on new producers, larger, well-funded companies could dominate the supply chain, leaving small growers at a disadvantage. Additionally, some argue that market oversaturation is overstated—many existing licenses are inactive, and preventing new entrants could stifle innovation and prevent healthier competition.
On the other hand, supporters of the moratorium believe price compression is already making the market unsustainable, and without a pause, even more businesses—especially independent growers—could collapse. Wholesale cannabis prices have plummeted due to oversupply, and with retail margins also shrinking, many mid-sized producers are struggling to break even. A temporary licensing freeze could allow time for supply and demand to rebalance, protecting existing license holders from being further undercut by an influx of new cultivators selling at rock-bottom prices.
House Bill 230: Employment Protections for Medical Cannabis Patients
Introduced by Representatives Reena Szczepanski and Liz Thomson, HB 230 seeks to clarify when and how employers can drug test employees who are medical cannabis patients under the Lynn and Erin Compassionate Use Act.
Under this bill:
Employers cannot take adverse action against an employee for legal medical cannabis use unless required by federal law.
Employees cannot be deemed impaired solely based on the presence of cannabis metabolites in drug tests.
Random drug testing for cannabis is prohibited. Testing is only allowed when there is reasonable suspicion of impairment, such as after a workplace accident involving significant damage or injury.
The Department of Health and the Workforce Solutions Department will develop impairment guidelines based on scientific research to help employers determine workplace impairment.
This legislation aims to protect medical cannabis patients from unjust employment discrimination while still allowing businesses to maintain workplace safety standards.
Implications for Employers
House Bill 230 presents major implications for employers, particularly those in industries where safety and compliance with federal regulations are key concerns. While the bill strengthens employment protections for medical cannabis patients, it also places new restrictions on how and when businesses can conduct drug testing. Employers will need to reassess their workplace policies, ensure compliance with the law, and develop clear impairment assessment protocols that align with state guidelines.
To help businesses navigate these changes, the Department of Health and the Workforce Solutions Department will develop evidence-based impairment guidelines. These may include:
Physical and cognitive performance indicators that signal impairment.
Standardized evaluation procedures for suspected impairment cases.
Training programs for supervisors and HR personnel on recognizing cannabis-related impairment.
Employers will need to integrate these state-provided guidelines into their internal policies, ensuring that decisions about impairment are backed by objective, research-based criteria rather than subjective judgment.
Senate Bill 89: Freezing the Cannabis Excise Tax Rate
Senator Katy Duhigg’s SB 89 aims to halt the scheduled increases in New Mexico’s cannabis excise tax, a move that could have significant implications for both license holders and consumers.
What is the Current Excise Tax Schedule?
Under existing legislation, New Mexico’s cannabis excise tax is currently set at 12% but was designed to increase incrementally over the next several years:
12% until July 1, 2025
13% in 2025
14% in 2026
15% in 2027
16% in 2028
17% in 2029
18% by 2030
If SB 89 is passed, the tax rate would remain locked at 12%, preventing these automatic annual hikes. For license holders, stopping the tax increase is a major win, particularly as the industry grapples with price compression and increasing operational costs. For consumers, keeping the excise tax at 12% instead of increasing to 18% would result in more affordable cannabis over time.
What These Bills Mean for New Mexico’s Industry
If passed, these bills could have significant impacts on the state’s landscape:
SB 152 could slow the growth of new businesses in certain counties, particularly in areas concerned about overproduction and market saturation.
HB 230 strengthens employment protections for medical patients while still allowing reasonable workplace safety measures.
SB 89 provides tax stability for recreational businesses, preventing future price increases that could impact consumers and drive sales to the illicit market.
As the session unfolds, these bills will be debated and potentially amended before any final decisions are made. With New Mexico’s industry evolving rapidly, lawmakers are working to balance regulation, business growth, and consumer protections.
