Councilor Sara Scott: Cannabis Town Hall Follow Up

Los Alamos County Councilor

I hope this note finds you and your families well as we head into winter and maybe some snow!!!

On Monday November 8, 2021 members of the County Council and County staff hosted a Town Hall focused on a proposed ordinance regarding cannabis retail operations in Los Alamos County – this ordinance will be considered at the upcoming December 7, 2021 County Council meeting. Background information regarding the ordinance was provided, but the Town Hall was primarily an opportunity for comments and questions from the public. Council has also received comments and questions from the community through other venues. 

The proposed ordinance applies only to retail sales of cannabis and does not impact personal use of cannabis or the cultivation of cannabis for personal use as legalized by the April 12, 2021, State of New Mexico Cannabis Regulation Act. 

In this note, I’m providing information regarding some of the questions and comments we’ve heard, as may be helpful to the upcoming County Council meeting and discussion of this topic. 

Why is Los Alamos County considering allowing cannabis retail operations now?

  • The proposed ordinance addresses cannabis retail operations within Los Alamos County in response to the April 12, 2021, enactment of the State of New Mexico Cannabis Regulation Act which legalized the production, manufacturing, sale, and adult-consumption of cannabis for recreational use throughout the State. 
  • In a previous ordinance adopted by Council on September 28, 2021, the County codified regulations regarding cultivation and manufacture of cannabis. The ordinance that will be considered by Council on December 7, 2021 pertains to retail cannabis operation. 
  • This is a time sensitive topic. Beginning January 1, 2022, the State Cannabis Control Division will accept applications for all license types, with retail sales to be permitted no later than April 1, 2022. Although the County’s Chapter 16 Development Code is currently undergoing an update process, the County is acting to incorporate State law changes into County Code in order to have local regulations firmly in place to prepare for when license applications will start being accepted by the State.
  • On October 27, 2021 the P&Z Commission recommended the current draft of the proposed cannabis retail operation ordinance for County Council consideration. This recommendation was based on extensive open and detailed discussion at the public hearing, including public comment and input.

Why can’t Los Alamos County ban cannabis retail operations?

  • The State of New Mexico has legalized the cultivation, manufacture and retail sale of cannabis throughout the state and has prohibited county and city governments from banning it.
  • However, the Cannabis Regulation Act leaves it to the County to establish where cannabis operations will be allowed under the County’s zoning ordinances, to determine reasonable hours of operations for retail cannabis operations, and to determine if and where cannabis can be consumed outside of the home.  
  • For all cannabis operations the State, not the County, issues the cannabis licenses. However, as with any retail business that requires a state license to sell its wares such as a pharmacy or liquor store, that state license does not exempt the retail business from complying with local zoning regulations, and the relevant life safety codes such as the Fire and Building codes. Any cannabis operation in the County is required to obtain a business license from the County. When a business license application is filed the County will, as it does with all business license applications, review and determine whether the proposed cannabis establishment is zoning and life safety code compliant.
  • What can the County regulate in relation to cannabis?
    • We can limit density of licensed operator locations.
    • We can limit operating times consistent with neighborhood uses.
    • We can establish rules and regulations for the smoking, vaporizing, and ingesting of cannabis products within an indoor or outdoor cannabis consumption area. 
  • What can’t we modify?
    • We can’t change the State mandated 300-foot buffer zone from schools or licensed day cares.
    • We can’t adopt modifications that conflict with the Dee Johnson Clean Indoor Air Act as codified in the County Code Chapter 18 Article IV. 
    • Also, the State Cannabis Regulation Act is quite clear that cannabis cannot be smoked in public places which the Act defines as” a place to which the general public has access and includes hallways, lobbies and other parts of apartment houses and hotels that do not constitute rooms or apartments designed for actual residence; highways; streets; schools; places of amusement; parks; playgrounds; and places used in connection with public passenger transportation.” Per the Act anyone who smokes cannabis in a public place is subject to a fine.  This prohibition of smoking cannabis in public places also applies to medical cannabis.
    • The State Cannabis Regulation Act also prohibits a municipality or county from:

• completely prohibiting the operation of licensed adult-use cannabis operations within its boundaries; 

• preventing the transportation of cannabis products on public roads when such transport is in compliance with the Act; 

• prohibiting or limiting signage attached to or located on licensed premises that identifies the premises as a cannabis establishment; 

• requiring a licensed premises or a cannabis consumption area to relocate more than 300 feet from a school or daycare center that was in existence at the time the cannabis establishment was licensed; and 

• requiring an existing licensee to relocate, or prohibit a person from producing homegrown cannabis as provided for in the Act. 

Does the proposed ordinance change the way medical cannabis is licensed?

  • No, medical cannabis is regulated under a different state statute than the Cannabis Regulation Act and is governed by different state regulations already established by the Secretary of Health.  Medical cannabis operations will continue to be licensed by the State using the existing medical cannabis process. A separate state regulatory process will be used for general cultivation, manufacturing and retail licensing authorized by the Cannabis Regulation Act. 
  • Nothing in the new State law regarding general cannabis cultivation, manufacture, and retail sales “shall be construed” to limit use, dispensing, possession, prescribing, storage, or transport of medical cannabis as provided for in the Lynn and Erin Compassionate Use Act.  (NMSA 26-2C-23).

The New Mexico state law notes an interest in encouraging microbusinesses; how is this accomplished in the new cannabis legislation?

  • For microbusiness operations, which are limited to 300 plants, an expedited licensing process will be used by the State. 
  • Additionally, rather than applying for separate cultivation, manufacturing, and retail licenses, applicants can apply for an integrated microbusiness license for multiple operations.
  • Because the State is not yet accepting license applications for retail, only integrated licenses for cultivation and manufacturing are currently being accepted. 

What is Los Alamos County’s role in licensing a cannabis operation?

  • The County does not issue licenses, the State of New Mexico issues licenses for cannabis operations. The State is already accepting license applications for cannabis cultivation and manufacture and will begin accepting license applications for retail operations on January 1, 2022.
  • Once an operation has a license from the State, the business will need to register with Los Alamos County.  

Where will cultivation, manufacturing and retail cannabis business operations be allowed in Los Alamos County?

  • Allowable locations for business operations are codified in Chapter 16 of the County Code.
  • The proposed County ordinance to be considered in December allows for cannabis retail operations in retail zoning districts, as for all retail businesses. 
  • The ordinance adopted by Council on September 28, 2021, regarding cannabis cultivation and manufacture, allows for these operations to occur in the County’s commercial, industrial, and mixed-use zoning districts.
  • The proposed ordinance does not allow cannabis manufacturing operations in residentially zoned areas. 
  • The proposed ordinance does not allow cannabis cultivation and retail sales of cannabis authorized under the Cannabis Control Act in residentially zoned areas, however, it does allow cannabis cultivation and retail sales authorized under the medical cannabis statute, the Lynn and Erin Compassionate Use Act, in residentially zoned areas.  

What other modifications to the State law are included in the proposed County ordinance regarding cannabis retail operations?

  • The hours of operation (7am – 12am) are consistent with local liquor sale operations.
  • Three hundred feet are required between retail operations.
  • On-site consumption at a retail venue is allowed – except for smoking and vaporizing, which are not allowed.

Why is 300 feet proposed for limiting the density of cannabis retail operations?

  • The 300-ft distance is based on a review of ordinances already adopted and on discussions with Taos, Santa Fe, Albuquerque and other municipalities within and outside the state, and on their experiences with legalization of cannabis retail operations. 

How are smoking and vaporizing at a retail venue consistently regulated through local laws? Why is smoking allowed at local clubs, and will cannabis smoking and vaporizing be allowed at those locations?

  • Smoking in areas open to the public is not allowed pursuant to the New Mexico State Indoor Air Act and Chapter 18 Article IV of the Los Alamos County Code.
  • Also, it is illegal for to smoke cannabis outside of a residence in indoor and outdoor public places, unless those places are designated cannabis consumption areas as established the County. 
  • Clubs are licensed by the State and are required to address potential cannabis consumption on their premises through a different state licensing process. 

How much excise tax will cannabis operations generate in Los Alamos County? Would this grow over time? Does it go to the General Fund?

  • The State will collect Gross Receipts Tax and reimburse the local allocation back to local governments as is currently done for all retail businesses. Funds remitted back to the County would go into the County’s General Fund.
  • Any taxes collected would depend on the number of licensed facilities and the level of sales. The excise tax increases from 12% in 2025 to 18% in 2030. This tax does not apply to medical cannabis retail sales.