Committee pauses HB112; sponsor to revise language to secure FBI criminal-history checks for cannabis licensing

The Commerce & Economic Development committee heard testimony on HB112, a bill to amend the Cannabis Regulation Act to allow nationwide (FBI) criminal-history background checks as a condition of cannabis licensure. Representative Luhan, sponsor of the bill, and agency staff told the committee the current statute prevents the state from obtaining FBI records and leaves regulators limited to state-level checks.

The legislation matters because regulators said they currently cannot see criminal convictions that may exist outside New Mexico, which they and industry supporters said could allow people with disqualifying convictions in other states or countries to obtain licenses in New Mexico. The bill seeks to correct statutory language so the Cannabis Control Division and the Regulation and Licensing Department can obtain and use nationwide criminal-history information for licensure decisions while protecting sensitive records.

Representative Luhan, sponsor, said HB112 "provid[es] for state criminal history checks and national criminal history background checks as a condition of eligibility for licensure," and described the change as necessary because "the FBI has refused to provide New Mexico, RLD, and the CCD access to nationwide criminal background information for civil licensure purposes due to the statutory deficiencies in the original Cannabis Regulation Act." Todd Stevens, director of the Cannabis Control Division, told the committee the division "stands in strong support of this bill" and called federal background checks "an effective tool in helping regulate the adult use cannabis market effectively." Kevin Graham, chief general counsel for the Regulation and Licensing Department, explained that the draft narrows the background-check subject to a human "so for that limited purpose for the background checks, we had to make sure that meant human." He added the term "person" elsewhere in statute will still cover corporate applicants except where the bill explicitly requires a fingerprinted human.

Supporters from the industry also testified in favor. John Thompson, a registered lobbyist for Oasis Cannabis Company, said he "strongly support[s] the legislation." Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, called the bill "part of the original intent of the Cannabis Regulation Act" and said other states have followed similar fixes. Mary Kay Root, former director of the Alcoholic Beverage Control Division, and several business representatives also spoke in support.

Committee members pressed the sponsor and agency witnesses on several points. Questions and requested clarifications included: - Whether expanding the pool of applicants subject to the bill (for example, adding laboratory or retail applicants) would slow licensing; the Fiscal Impact Report and the Office of the State Engineer raised concerns that adding water-rights proof for certain applicant types could slow processing. CCD and RLD representatives said they do not expect background-check processing by DPS to be slowed, but committee members asked the sponsor to review and, if appropriate, remove or relocate water-related language. - How criminal-history results would interact with New Mexico's Inspection of Public Records Act (IPRA). Kevin Graham and CCD counsel said criminal-history record information obtained from the FBI would be protected and that only limited information (for example, a notice of contemplated action stating a disqualifying conviction) would be publicly disclosed unless an applicant chose to enter the full report into a hearing record. - Which convictions remain disqualifying. CCD counsel explained the bill would use the CRA's existing disqualifying categories; convictions for offenses such as trafficking, embezzlement or fraud can still disqualify an applicant, while some prior cannabis convictions do not automatically bar licensure under current law.

The committee also considered a set of late amendments (listed by the sponsor as seven minor adjustments intended to reflect FBI feedback and clarify that fingerprints apply to persons rather than entities). Members agreed the amendment language needs further cleanup. The amendment was moved and seconded for consideration but was not adopted during the hearing. The sponsor said she would coordinate with the committee analyst and staff (including Mr. Bailey) to produce a clean substitute; the chair requested the sponsor replace the text and bring a revised bill back for the next committee.

No formal committee vote on final passage of HB112 occurred during the hearing. The committee directed the sponsor to revise the bill to (1) remove or rework the water-related provisions if appropriate, (2) make explicit that FBI checks apply to human applicants (fingerprints), and (3) strengthen confidentiality language around criminal-history records to address IPRA/privacy concerns.

The hearing lasted one item (HB112) and included testimony from agency staff, industry representatives and multiple committee members. Committee members described the bill as "an essential piece" but asked for clarifications and statutory clean-up before action. Representative Luhan said she was "amenable" to changes and would return with a revised substitute.

The committee adjourned with the bill held for further work and did not adopt the amendment or vote to advance HB112 at this session.