A proposal to offer up to $ 5 million in loans to help cannabis micro-businesses failed to get hold of a Legislative Committee hearing Thursday after some lawmakers said there wasn’t enough detail to warrant assistance .
Legislators on the New Mexico Treasury Oversight Committee voted 6-5 to derail a Treasury oversight proposal to use unused millions from a long-running Revolving Fund program for economic development to extend the loans.
The plan, proponents said, was to offer loans of up to $ 250,000 to eligible applicants over the next five years. Micro-businesses are those that plant or sell no more than 200 plants at a time.
“If we don’t find a way to help these micro-businesses enter the market, they will end up being expelled,” Linda Trujillo, director of state regulation and licensing, told lawmakers during Thursday’s hearing. Her division previously created a Cannabis Control Division to oversee the state’s fledgling cannabis industry.
She said the “biggest barrier” to access to the state cannabis regulatory law – which went into effect this year – was “access to capital.”
The loans were for recipients with a track record in agriculture who have been approved for a license to operate a cannabis business.
While loans would have been directed to economically disadvantaged rural and agricultural communities, as well as those who suffered drug abuse, some lawmakers said there wasn’t enough detail on how the financial regulator would screen and select applicants and whether the money gets to those who need it the most.
“We may need to slow things down so we can do things right,” said Senator Stuart Ingle, R-Portales. “There are a lot of things here that we have to look at.”
Senator Joe Cervantes, D-Las Cruces, said he didn’t like that the cover page for the proposed loan rules included a sentence announcing that the Legislative Committee approved the rules on Thursday – which makes it sound like it was it even before the vote.
“That feels like this is a take-it-or-leave-it situation,” said Cervantes. “It sounds like we have to approve this now.”
He said the way the proposal was pushed “bypasses the legislative process”.
Earlier this year, Governor Michelle Lujan Grisham, a long-standing Democrat who has campaigned for the legalization of cannabis use and possession in New Mexico, signed the Cannabis Regulation Act, which regulates the production, manufacture, sale and use of cannabis for people 21 years allowed.
When Trujillo’s agency began developing rules for cannabis producers, manufacturers, retailers, and other businesses, many New Mexicans raised concerns that entry fees could be hard to come by for smaller operators.
This is in part because cannabis production and use remains illegal under federal law, which means cannabis companies do not have access to federal loans.
“There’s no place for a small business to get such a loan,” Marquita Russel, CEO of the New Mexico Finance Authority, told committee members.
MEP Liz Thomson, D-Albuquerque and chair of the committee, first urged Russel and Trujillo to address some of the concerns raised by lawmakers and to re-examine the proposal in the November session.
Thomson, who backed the proposal, then suggested that Russel and Trujillo return on Friday to try again, but several lawmakers, including Cervantes, said it was “inappropriate”.
Thomson said she would check with the state Legislative Council on Friday to see if it was possible to respond.
“If it can be done, we will, and if not, we won’t,” she said.
The director of the Legislative Council, Raúl Burciaga, was out of office on Thursday and could not be reached for comment.