New Mexico legal cannabis customers would number 250,000, economist says

More
Senate Corporations and Transportation Committee hears presentation on economic impacts of cannabis legalization.

Senate Corporations and Transportation Committee hears presentation on economic impacts of cannabis legalization.

New Mexico would have about 250,000 potential customers of cannabis should the state legalize adult recreational use of cannabis, an economist told the Senate Corporations and Transportation Committee yesterday. And those consumers would purchase roughly $412 million worth of the drug in the first year.

The data was produced by Dr. Kelly O’Donnell, an economist who served as Director of State Tax Policy, Deputy Cabinet Secretary for Economic Development, and Superintendent of the New Mexico Regulation and Licensing Department during Gov. Bill Richardson’s administration. She now works as a consultant. Her report was commissioned by Ultra Health, a New Mexico provider of medical marijuana. To derive her estimates, she utilized in part survey data from the National Survey on Drug Use and Health, which was produced by the U.S. Department of Health and Human Services.

Of those potential customers, she estimated in the report that 138,000 live in New Mexico and 119,000 live in Texas within 200 miles of the New Mexico border.

Noting that 44 percent of Colorado’s market is from out-of-state tourists, O’Donnell emphasized the potential boost from Texas consumers should New Mexico legalize cannabis.

“Unlike Colorado, we have a big border with Texas,” she told committee members. “We have almost as many potential users of marijuana within a couple hundred miles of the New Mexico border on the Texas side as in all of New Mexico.”

Her report did not include estimates of tax revenue the state would bring in, but did include job estimates: 11,400 new manufacturing and marketing jobs, and 4,780 jobs in businesses that service the cannabis industry. 

fullsizerender-3

Emily Kaltenbach, Executive Director of Drug Policy Alliance of New Mexico and Dr. Kelly O’Donnell, economist.

O’Donnell was joined in her presentation by Emily Kaltenbach, Executive Director of the Drug Policy Alliance of New Mexico. The two pointed to a range of benefits of legalization, including tax revenue, job creation, and a reduction of criminal prosecution for marijuana possession.

But not all senators on the panel were convinced of the benefits of legalization.

“You mentioned all the benefits, is there any downside to this?” Sen. William E. Sharer, R-Farmington, asked.

O’Donnell replied that in her analysis she didn’t see a potential downside because a shift from an illicit market to a regulated legal market would generate revenue, creates jobs and also undercut crime and public safety issues.

Sharer said he’d read studies that the state of Colorado has seen an increase in medical costs since legalizations, in part due to medical issues related to things such as car accidents.

“We don’t have any stoned and driving laws, so we don’t know,” he said. “We don’t know what stoned and driving is until you crash into a train a die.”

Kaltenbach replied that traffic fatalities in Colorado had not increased due to marijuana use and that public education is necessary when such a huge policy shift is considered.

“When you actually build a legal and regulated system, you need to build in prevention and education efforts for young people,” she said.

Still not convinced of the economic benefits of legalization, Sharer said that New Mexico can grow its economy in other ways, such as becoming the center for energy in the Southwest by investing in air, solar and nuclear power.

“I don’t think this is positive or negative, economically, it’s certainly not the great answer to all of our economic woes,” he said.

Sen. Clemente Sanchez, D-Grants, raised questions around the enforcement of federal law by the new administration of President Donald Trump, who has appointed Sen. Jeff Sessions, R-Alabama, as his Attorney General. Sessions is on the record opposing marijuana legalization.

Kaltenbach said that it’s a waiting game to see what the new Attorney General will do but she’s optimistic.

“If we were to legalize here, it would be a couple of years, if that, before sales happen,” she said. “And so, I think we will have a lot to learn in those couple of years. I do think that states are a laboratory success, in that we should move forward with something like this and there are other states that are paving the way in front of us.”

O’Donnell and Kaltenbach fielded a wide range of questions from Senators, in a conversation that last more than an hour.

You can watch the archived video of the committee session here. Check out our article about the debate surrounding marijuana legalization in New Mexico.

Robert Salas holds NMID’s 2016 fellowship for a student journalist involved with the New Mexico News Port at the University of New Mexico.