Texans have helped fuel New Mexico’s cannabis industry. But here, changes to pot laws seem unlikely

It’s been two years since New Mexico legalized recreational cannabis, and sales data shows Texans are helping what’s become a multimillion-dollar industry for the state. Despite that, Texas lawmakers seem even farther from approving any sort of marijuana reform than they were just a few years ago.

By Julián Aguilar, The Texas NewsroomMay 9, 2024 9:19 am,

From KERA News:

When Texas Democrats convene in El Paso next month for their 2024 party convention, they’ll be just a few miles from a row of retail shops in New Mexico where Texans have helped fuel a multi-million-dollar recreational cannabis industry.

For Democrats who’ve long advocated for Texas to lower penalties for pot possession – or even legalizing its use in the state – that’s probably as close as they’ll get to recreational cannabis for the foreseeable future.

Although efforts to lower penalties for possession of cannabis have gained traction in the Texas House since 2015, they’ve stalled in the Senate. For some, it signals that Texas legalizing recreational weed – something 24 other states and Washington, D.C. have done in recent years – is nothing more than a pipe dream.

“I think it’s a hard ‘no’ from the governor’s mansion on retail [recreational sales]. I think it is a hard ‘no’ in the Senate on retail. I don’t know how that vote would come down on the House,” said state Rep. Joe Moody. The El Paso Democrat’s district borders New Mexico, where sales of recreational cannabis have now been legal for just over two years.

While the Texas Legislature continues to reject legalized cannabis – and the millions in tax revenue it can provide – West Texans continue to flock to their neighbor to the west.

On a recent Thursday, manager Rick Martinez was helping his fellow budtenders cater to customers at the Sunland Park location of R. Greenleaf, a statewide chain of medicinal and retail cannabis stores. Just after 10 a.m., a line had already formed along a glass display case showcasing the shop’s latest offerings.

Despite Sunland Park’s population of less than 18,000 people, crowds like this are normal for Martinez. He said shoppers from the Lone Star State are to thank.

“The majority of our customers are going to be Texas-based,” he told The Texas Newsroom.

And this isn’t just a hunch: The numbers back up his assumption.

Since New Mexico began selling recreation cannabis in April 2022, the dispensaries in Sunland Park have made nearly $71 million in sales. That’s just shy of the approximately $79 million in sales Santa Fe saw over the same period.

R. Greenleaf is one of several stores in Sunland Park, New Mexico selling cannabis products. Recreational sales in the state began just over two years ago.
Julián Aguilar / The Texas Newsroom

At around 90,000 people, Santa Fe’s population is about five times larger than Sunland Park.

The state of New Mexico doesn’t track where customers are from. But Martinez, who also lives in El Paso, said it’s no secret that most Sunland Park cannabis shoppers have made the short drive from Texas. While that’s good for his bottom line, he said it also shows Texas is missing out on millions of dollars – or more – in revenue by not allowing recreational cannabis sales.

“We all know that Texas is very – how can I say it? We’re not too liberal,” he said. “But I think that it would be in the best benefit for Texas to do something like this. The evidence is there.”

Armando Flores, a budtender at locally owned Yerbaviva in Sunland Park, estimates his customer base is about 80% Texan.

“It’s people that are originally from El Paso or people that are actually traveling out of Central Texas, East Texas … just to visit the casinos and dispensaries that they have outside of the states that, you know, they can get in their state,” he said.

And it’s not just a boost for New Mexico’s economy. The state’s also raking in millions in tax revenue.

This March, a month shy of the two-year anniversary of when New Mexico began recreational sales, Gov. Michelle Lujan Grisham put out a news release saying tax revenue from recreational and medicinal cannabis sales had added about $75 million to the state’s general fund. New Mexico’s 12% state tax is on top of city sales taxes that are also applied. That means more money for municipal governments too.

All those taxes do translate into higher consumer costs. At Martinez’s R. Greenleaf store, 3.5 grams – about eighth of an ounce – of hybrid strains like Cookies and Cream or French Bread could run just north of $40. But he said his shoppers agree it’s a small price to pay for readily available, safe and regulated products.

“The majority of the customers are comfortable paying that extra tax because they are getting the medicine that is giving them that relief [they want],” he said.

Texas trends on pot laws

While the cannabis business is thriving in New Mexico, Texas has held fast against it. If some state lawmakers continue pushing for lighter penalties and recreational use, they’ll likely face familiar roadblocks.

In 2019, Rep. Joe Moody authored legislation that would have made possession of up to an ounce of cannabis a Class C misdemeanor, down from a Class B infraction. The legislation had passed the Republican-dominated Texas House, but never gained traction in the state Senate.

A similar law by state Rep. Erin Zweiner, D-Driftwood, also passed the Texas House in 2021. But that legislation also stalled in the Texas Senate.

Moody said the vote in 2019 showed there was some bipartisan appetite at the time for changing the state’s laws on possession. Current House Speaker Dade Phelan, R-Beaumont, was a co-author of Moody’s legislation before he ascended to his current position. As originally filed, the 2019 bill would have made less than an ounce of marijuana a civil infraction. (Phelan’s office did not respond to The Texas Newsroom’s requests for comment on whether he’d consider similar legislation during next year’s legislative session should he be reelected.)

After discussions with Abbott’s office, however, Moody agreed to amend his 2019 legislation to add the Class C misdemeanor language. He said it was a compromise that signaled progress.

But in the five years since, some conservative Texas lawmakers remain against any sort of marijuana reform.

Delta 8 THC products on sale in East Dallas. Last month, Texas’ Republican Lt. Governor Dan Patrick asked a state Senate committee to examine a potential ban on Delta 8 and Delta 9 products in Texas.
Rachel Osier Lindley / The Texas Newsroom

“The [state] Senate seems to be looking backward in their philosophy, and they’ve always been a stumbling block,” Moody said. “I don’t know how I get that bill to the governor’s desk.”

Moody also pointed to a recent demand from Texas’ Republican Lt. Governor Dan Patrick, who tasked the Senate State Affairs committee with studying a potential ban on Delta 8 and Delta 9. Those products – which can produce similar psychoactive effects to cannabis – are derived from the hemp plant and are considered legal under the Farm Bill of 2018. That federal law made hemp and its derivatives legal if their THC content is less than 0.3%.

Last month, Patrick told the committee to “examine the sale of intoxicating hemp products in Texas” and recommend additional regulations over the products’ sale and use, specifically among minors. The Texas Department of State Health Services moved to ban the products in 2021, but a pending lawsuit has kept them available in Texas for now.

At the federal level, the Biden administration recently announced a move to reclassify marijuana as Schedule III drug, a less dangerous category.

Frank Snyder, a professor of law at Texas A&M University, told the Texas Standard last week that the move would mark the largest drug policy change in recent memory. But the change would only apply to federal policy.

“Technically, it doesn’t make any real change in state requirements,” he said.

At the state level, Moody said, if lawmakers aren’t even moved by a criminal justice argument, recreational sales in Texas are nowhere in sight.

“I think Texas is never going to do anything on a retail usage [law],” he said.

For Andy Armendariz, an El Paso resident who was part of the long line at R. Greenleaf in Sunland Park, that doesn’t make any sense. People are going to enjoy cannabis whether it’s legal or not, he said. And legalizing and regulating it makes it safer for the user.

“It can be sketchy buying from, you know, people that you don’t know,” he said. “I know it’s hard to trust people nowadays. You don’t know what you’re getting.”

Asked what he’d tell his own state’s lawmakers about Texas’ current opposition to ending the prohibition on recreational marijuana, Armendariz chuckled and said: “Get over it.”

“It’s not that big of a deal,” he said. “It’s not a gateway drug. I’ve been smoking weed, and I have not moved on to anything else.”

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