Summary of New Hampshire HB 1598: Adult-Use Cannabis Legalization with State-Run Stores
On March 31, 2022, the New Hampshire House of Representatives amended then passed HB 1598, which would legalize adult-use cannabis possession and only allow sales from state-run stores. MPP is concerned the state-run store model would be unworkable until federal law changes. The House previously passed a bill to legalize adults’ possession and home cultivation of cannabis (HB 629). Both bills are in Senate committees. Here is a summary of HB 1598:
Adults 21 and older could possess up to four ounces and 10 grams of concentrates, and edible or drinkable cannabis-infused products containing no more than 300 milligrams of THC.
Registered therapeutic cannabis patients may also possess cannabis-infused creams, oils, and tinctures containing no more than two grams (2,000 milligrams) of THC.
Adults could share legal amounts of marijuana with other adults.
Adults could possess, make, and sell (to other adults) marijuana accessories, as long as they comply with state rules on the safe manufacture of accessories.
Prohibited Conduct and Penalties
Home cultivation would remain illegal and punishable by possible jail time.
Smoking or vaping marijuana in public would be punishable by a fine of up to $500.
Consuming marijuana in a moving vehicle, including by a passenger, would be punishable by a fine of up to $500 for a first offense and up to $1,000 for a second offense. In the case of a driver, one’s license would also be suspended.
Penalties for minors who possess marijuana would remain unchanged.
Only licensed product manufacturers could perform hazardous extractions.
Adult-use cannabis stores would be run by the Liquor Commission, which anticipates it would open 10 standalone stores. (No state has taken this approach because cannabis is federally illegal. MPP is extremely skeptical that state-run stores will open before federal law changes. Requiring state employees to commit federal felonies is preempted.)
State-run stores could sell adult-use consumers flower cannabis and concentrates.
State-run stores could sell cannabis products (such as lotions and edibles) to registered patients. They could not sell cannabis products to adult-use consumers.
State Regulation and Licensing of Cannabis Cultivation and Production
A Division of Cannabis Enforcement and Licensing in the Liquor Commission would license private cultivators, product manufacturers, transporters, and labs. It may issue dual licenses.
Medical dispensaries (ATCs) could apply to operate a separate, for-profit entity as an adult-use cultivator, manufacturer, or transporter.
The Division would develop rules for cannabis businesses, including governing security, health and safety, transportation, home delivery, lab testing, labeling (including THC amounts), ensuring packaging does not appeal to children, operating hours, licensee training, and restricting advertising, marketing, and signage that would appeal to minors.
The Division would also require informational materials to be posted and disseminated, including about risks of cannabis use by adolescents, during pregnancy and while breastfeeding, and on safely storing cannabis.
There will be a state application fee, plus another $250 for the municipality.
Each application must be for a single address.
Applicants that comply with state and local rules would be licensed. It is unclear how licensees would be selected if there are more applicants than a local cap allows.
Except in the case of labs, either the applicant or one director, officer, partner, member, or manager must have been a New Hampshire resident for two or three years.
In most cases, a person who has been convicted of a drug felony may not work as an officer, director, general partner, member, or manager of a cannabis business or serve on its board, unless the entire sentence was completed at least five years prior.
Cannabis businesses cannot locate within 1,000 feet of a pre-existing K-12 school.
Localities could enact ordinances governing the time, place, and manner of cannabis business operations, limit their number, or ban cannabis businesses altogether.
The Liquor Commission must forward each application for a cannabis business to the locality, which may designate the entity responsible for reviewing them.
Pricing and Proceeds
Because the state would sell cannabis, there is no retail tax as such. But there is also no limitation on how much it could mark-up prices, which would serve as a de facto tax.
Creates a Cannabis Control Fund. After covering costs and paying back start-up funds:
50% is allocated to the education trust fund, reducing what must be levied;
30% would offset the retirement system’s unfunded liabilities;
the lesser of 10% or $25 million would be used by DHHS for substance abuse prevention and treatment and for education campaigns about cannabis, alcohol, and other drugs;
5% is allocated for overdose response and training police to detect impaired driving; and
5% is allocated for children’s behavioral health.
Banking and Financial Services
If needed, the bill authorizes the Business Finance Authority to create a state-chartered, single-purpose bank to accept cannabis-related funds from the Liquor Commission.
Allocates $10 million for initial capitalization for the bank.
Professional license holders could not be disciplined for providing services to cannabis businesses on the basis that cannabis is federally illegal.
Appropriates funding to DHHS to create public media and social media campaigns to educate about risks of cannabis use.
State and local law enforcement could not target individuals for cannabis-related conduct on the basis that they believe the conduct violates federal law, if it complies with state law.
Appropriates $14 million to the Liquor Commission for administrative costs and $150,000 to DHHS to educate the public about risks related to cannabis use.
The legalization of personal possession would take effect immediately upon enactment.
Regulations for private cannabis businesses would be issued within eight months.
They would begin accepting and processing applications by May 1, 2023 for cultivation facilities and by August 1, 2023 for other licensees.
Successful applicants would be licensed within 90 days.
There is no deadline for the Liquor Commission-run stores to open.