New Hampshire Panel OKs Changes To Marijuana Legalization Bill, Setting Up Full Committee Vote On Wednesday

A New Hampshire legislative subcommittee has approved a number of changes to a proposal that would legalize adult-use marijuana in the state, with the full House Commerce and Consumer Affairs Committee set to vote on the amended bill on Wednesday.

It’s the latest development in what’s already been a months-long process of negotiating and adjusting core provisions of cannabis legalization as lawmakers attempt to build consensus on a bill to send to Gov. Chris Sununu (R).

“We’re all working from the governor’s list of what would be needed in a bill,” Rep. Erica Layon (R), the sponsor of HB 1633, said at Tuesday’s subcommittee meeting. Among those prerequisites, which Sununu’s office circulated late last year, are a limit of 15 stores statewide, government control over retail outlets and a ban on lobbying and political donations by licensees.

“Reading through the governor’s list, he seems very strong on the 15 while also being pretty strong that the whole point of this is harm reduction, not profits,” Layon said, “and to make sure that the illicit market is a lot less attractive, because unfortunately, we have people in our state dying because they’re buying cannabis on the street that’s been contaminated with fentanyl.”

There is no reliable evidence that marijuana is being laced with fentanyl, though the synthetic opioid has been found in a variety of other illicit drugs.

Last year Sununu suggested a novel system of state-run stores, which a state commission later revised into a franchise model. But Layon and some others worry that even a franchise model—under which New Hampshire would be able to control the look, feel and daily operations of retail stores—could expose the state to significant legal liability.

Since introducing HB 1633 earlier this year, Layon has worked with members of the state commission—which failed to arrive at a consensus by a deadline last December—as well as lawmakers in the Senate who’ve dominated the legalization discussion.

Rep. John Hunt (R), who chairs the House committee, initially warned Layon that if she didn’t get support from counterparts in the Senate, her proposal would be dead on arrival.

At Tuesday’s meeting, Layon detailed changes she said she arrived at after conversations with Senate lawmakers. “I spoke with a few of the senators who were very involved in this, and I spoke to others trying to figure out where we can make our bill closer to something that would get broad support in the Senate,” she said.

The changes were introduced in an amendment circulated just minutes before the meeting began.

In its amended form, Layon said, the bill lays out a “highly regulated and transparent process” that’s meant to build consumer trust in the regulated market.

Already Layon had tacked away from the franchise model, which she maintains would create significant legal risk for the state. The latest amendment adjusts matters such as licensing of existing medical marijuana operators, tax allocations and penalties for smoking cannabis in public.

“A franchise model doesn’t have the transparency that we need for public trust,” she said. “And I think that when we set up a system like this, public trust is the most important thing.”

With regard to existing medical marijuana businesses, known in New Hampshire as alternative treatment centers, or ATCs, they would be able to apply for adult-use licenses but would not automatically be allowed to sell products to adults. That’s a change from a number of past proposals in the state that would have allowed ATCs to obtain dual-use licenses and sell both medical and adult-use products at retail locations.

Layon said ATCs would still be given an advantage when applying for licenses, given their expertise in the marijuana business, but she said she isn’t sure just how much of an advantage that should be.

“It’ll be one extra little tally in their court, because they’ve been here, they’ve done this market, they provided access to our patients,” Layon said, “but it won’t be the only deciding factor”

One of the more contentious changes is how the proposal would punish people caught smoking marijuana in public. While the first two offenses would incur a civil fine, a third violation could be charged as a misdemeanor and entail spending time behind bars.

Supporters of that approach have said that if people break the rule three or more times, they’re “almost intentionally trying to flaunt the law at that point.”

But the bill also provides no location other than private residences where adults can smoke legally, meaning renters and visitors to New Hampshire would either have to consume other products or risk the legal penalties.

Devon Chaffee, executive director of the ACLU of New Hampshire, urged lawmakers to drop the possibility of jail time from the proposal.

“The idea that we would be criminalizing nonviolent activity that right now is not criminalized through passage of the marijuana legalization law,” she told the subcommittee, “I think does not make sense.”

Chaffee pointed out that other, similar violations never incur jail time, such as smoking cigarettes indoors despite it being unlawful. “There are many things for which that are violations of the law for which you might face a fine for which we do not believe that somebody should in fact go to jail,” she said.

Hunt pushed back, likening smoking in public instead to drunk driving. But he backed away from that comparison after Chaffee and members of the panel itself emphasized that impaired driving is dealt with separately under the legalization bill.

Another member of the panel, Rep. Jared Sullivan (D), said he’s been frustrated by the state’s restrictive approach to legalization, which he predicted will ultimately make the path forward more difficult.

“I think it’s unfortunate that we have so many people in this state who are unwilling to get away from the fear of it,” he said, “so that we have to be so restricted to the point that there is the potential that the illicit market isn’t wiped out because we only have 15 stores or we have a state-run model where the door opens for corruption.”

“The people who are so opposed to the more free-market approach should understand the consequences of what I would call stubbornness on this issue,” he said. “I will swallow the bitter pill and support this bill, because I think the benefits outweigh the costs, but I think it is hard for me to swallow.”

Rep. Anita Burroughs (D) said the bill is “not 100 percent of what anybody wants,” but warned that the state is “taking a crapshoot if we don’t pass it this year” given the election later this year.

“We don’t know who’s coming into the governor’s office. We don’t know who’s going to be in the majority,” she said. “It could be two years, four years, six years, eight years, and how many more times are we going to go through this? It’s like Groundhog’s Day.”

But Rep. Lilli Walsh (R), a no vote on the proposal, said the bill can’t change the fact that marijuana is still illegal federally.

“And so for that reason, I would continue to be a no vote,” Walsh said. “And I love Groundhog Day.”

The amendment adopted in subcommittee on Tuesday also makes adjustments to how tax revenue is allocated. Among other earmarks, 15 percent would go to pension obligations, although Layon said she’s open to reducing or eliminating that amount. “Apparently a lot of people don’t want their pensions paid for by pot,” she noted.

Another 10 percent would go to a community reinvestment fund, “because water and sewer access is one of the big limitations for new housing construction in the state,” Layon said, while an additional 10 percent would go to a substance abuse prevention, treatment and recovery fund.

Municipalities that host retail stores, behavioral health programs and public safety agencies and drug recognition experts would each get 5 percent of revenue.

“This brings it back significantly to what had already passed through Ways and Means last year,” Layon said, “so that we have a more consistent view. This gets as close to heads as close to everything that I had in the discussions with Sen. Abbas and Sen. Lang, although it does not have the franchise model.”

Abbas and Lang were two members of the state commission that studied cannabis legalization late last year under a charge to craft recommended legislation for the shift. But members ultimately failed to agree on a way forward for cannabis policy in the state.

“Ultimately, the Commission voted not to recommend legislation for the 2024 Session,” said a report issued late last year. “The Commission was unable to reach a consensus because of a large number of unresolved issues.”

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Hunt, who also served on the commission, worked extensively on marijuana reform issues last session and attempted to reach a compromise to enact legalization through a multi-tiered system that would include state-controlled shops, dual licensing for existing medical cannabis dispensaries and businesses privately licensed to individuals by state agencies.

Lawmakers, however, reached an impasse on the complex legislation, which was being considered following Sununu’s surprise announcement that he backed state-run legalization. Meanwhile the Senate last year defeated a more conventional legalization bill, HB 639, despite its bipartisan support.

In May, the House separately defeated a different marijuana legalization amendment that was being proposed as part of a Medicaid expansion bill.

The Senate also moved to table another piece of legislation that month that would have allowed patients and designated caregivers to cultivate up to three mature plants, three immature plants and 12 seedlings for personal therapeutic use.

After the Senate rejected reform bills in 2022, the House included legalization language as an amendment to separate criminal justice-related legislation—but that was also struck down in the opposite chamber.

The full Commerce and Consumer Affairs Committee is expected to take up the amended bill on Wednesday afternoon.

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Photo courtesy of Chris Wallis // Side Pocket Images.