The New Hampshire State House. Credit: Teemu008 / Flickr

A bill that would legalize cannabis in New Hampshire creating a tax-free state-run dispensary monopoly to compete with the state’s medical program cleared its second committee on Mar. 21, leaving one last House vote to determine whether or not it continues to the Senate.

The bill would create a tax-free adult use market, threatening the state’s medical cannabis program due to the lack of limits on cultivation, according to Matt Simon, a longtime medical cannabis activist and spokesman for Prime Alternative Treatment Center. Medical dispensaries must exist as parts of vertically integrated operations and they must all cultivate their own supply. Without a limit on cultivators for the adult use market, it will be hard for medical dispensaries to compete. 

“It would probably destroy that program,” said Simon. “They might be able to survive by becoming suppliers for the adult used market, but why would anybody stay a patient? Why would anybody continue to go to dispensaries and you know, get the education and support that’s provided in the medical program when they can just go to a cheap adult use place.”

HB 1598, which was introduced in January, is a bipartisan legalization bill sponsored by seven Republicans and two Democrats. The bill was released from the House Ways and Means Committee on Mar. 21 after the committee approved a third amendment to the bill.

The committee vote was a 12-10 partisan vote, with the majority Republicans moving the bill to the House floor, despite Democrats’ attempts to place it in interim study.

“The big story is that the Democrats held their support for the bill,” said Matt Simon, a long time activist who also serves as spokesperson for medical cannabis company Prime Alternative Treatment Center. “All ten of them strongly preferred to have it go to interim study recognizing that there are many flaws that were not addressed, and all twelve of the Republicans voted to advance, including long-time prohibitionists.”

So far, three amendments have been approved for the bill. Those amendments include lifting the cap on manufacturing licenses, and keeping cannabis-infused edibles illegal.

There is also a pending floor amendment that would allocate half of the money the state receives for cannabis sales each year into an existing education tax fund. The cannabis cash would offset any taxes levied to maintain the annual levels of the state’s education trust fund.

Legalization activists in the state have criticized the bill for its lack of home grow legalization and that it would create a state monopoly on adult-use dispensaries.

The Senate also remains a tough hurdle, considering previous legalization bills have died there after passing the House. If signed into law, the bill stipulates that the State Liquor Commission, which would oversee the adult use market, must begin accepting and processing applications for cultivation licenses by May 1, 2023.

Aspiring operators will be able to apply for product manufacturing, transporting, and testing licenses by Aug. 1, 2023.

The New Hampshire House has four hundred representatives, making it one of the largest legislative bodies in the country. That immense size also makes it harder to ensure party line votes.

“Since our House of Representatives has traditionally been very supportive of cannabis legalization I suspect HB1598 will pass in the next vote as amended,” said Daryl Eames, founder of the New Hampshire Cannabis Association. “However, with so many members it’s also harder to tell in some respects, but we are optimistic at this time.”

Eames added that given some activist opposition to this version of the bill, it is tougher to predict how it will do in the House. 

“In terms of activist popularity there are organizations that will never be supportive of legalization,” he said. “Of those that would, some are not so thrilled with the concept of a government monopoly on retail sales, and we can certainly relate to that.”

Another change in the amended version of the bill that activists find positive is that it removed the previously stated cap of 15 cultivation licenses in total. As part of the removal of that cap, the three medical cannabis companies currently authorized to cultivate in the state would be able to obtain licenses to cultivate and manufacture for the adult use market.

“As I understand it, amendments were added to HB1598 allowing our medical organizations to apply for a recreational license with the ability to cultivate and sell to the government retail stores in an effort to protect them from the inevitable situation where some medical customers may decide to buy there cannabis in adult recreational stores,” said Eames. “Whether that is the ideal solution is up for discussion, but it is a step in the right direction for our medical industry and to ensure there is product available for the government retail stores when they open.”

In any case, Eames said he remains optimistic about the prospects of legalization in the Granite State.

“Ultimately no matter what bill is passed, there will always be more work to be done to improve the legislation afterwards as the industry launches and we learn more about what is needed to smooth out any rough edges. Should HB1598 become law, efforts to open up private retail will begin immediately, along with ancillary efforts around expungement of records for some cannabis related offenses as a couple of examples.

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Zack cut his journalistic teeth covering high school sports in the south before spending a decade covering local government, politics and the courts in the Boston, Massachusetts area. He's previously written...