SB89 would amend New Mexico’s cannabis excise tax law to eliminate the scheduled annual tax increases that were previously set to begin on July 1, 2025. Under current law, the cannabis excise tax was slated to rise from 12% to 18% in one-point increments over several years; this bill would keep the rate fixed at 12% instead of allowing those future increases to take effect. The bill does not change the tax’s application to medical cannabis sales, which remain exempt when sold to qualified patients, primary caregivers, or certain reciprocal participants with proper identification.
In practical terms, the bill would preserve the existing cannabis tax rate for adult-use sales and prevent future price increases tied to the excise tax schedule. It would amend Section 7-42-3 NMSA 1978, the statute governing the cannabis excise tax, and the change would take effect July 1, 2025. The bill is a tax policy adjustment affecting cannabis retailers, consumers of recreational cannabis, and state revenue collections tied to cannabis sales.
Impact
SB89 would directly alter New Mexico’s cannabis taxation statute by striking the incremental rate increases and locking the cannabis excise tax at 12%. This would reduce the projected future growth in cannabis tax revenue compared with current law and likely keep retail cannabis prices lower than they would be under the scheduled increases. The bill leaves intact the existing exemption for medical cannabis sales to qualified patients, caregivers, and reciprocal participants, so those transactions would continue to be untaxed under the excise tax provision.
Sentiment
Based on the bill title and the absence of recorded committee debate or votes in the provided materials, the measure appears to be presented as a straightforward tax relief or tax-stability proposal rather than a controversial policy overhaul. The sponsor’s framing suggests support for removing planned tax escalations, likely appealing to consumers and industry participants who prefer a stable tax rate. No contrary arguments are documented in the available record, so the overall sentiment cannot be measured from debate, but the bill’s purpose is clearly to halt future tax increases.
Contention
The main point of contention, if any, would likely be between supporters of keeping cannabis taxes stable and those who favor the scheduled increases as a way to raise state revenue or discourage consumption. Cannabis retailers and consumers would generally benefit from the fixed 12% rate, while state budget interests could be affected by foregone revenue from the repealed increases. Because no committee transcript or vote history is included, there is no recorded dispute in the provided materials, but the revenue-versus-affordability tradeoff is the central policy issue.