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Bleak prospects for state-run marijuana dispensaries in New Hampshire

New Hampshire is surrounded. Because the Granite State is the only New England state where recreational marijuana is illegal, residents must drive to Vermont, Maine or, God forbid, Massachusetts to buy cannabis for personal use. At home, possession of three-quarters of an ounce or less is punishable by fines ranging from $100 to $1,200. Expungement is also possible for simple possession offenses committed before decriminalization in 2017.

Easing penalties for marijuana possession hasn't really changed lawmakers' attitudes toward the drug in this Republican tri-state state. New Hampshire has no income or sales tax and some of the highest property taxes in the country. Revenue from the cannabis trade is one reason reformers prefer to keep those dollars in the state.

Potential revenue plays little role for state lawmakers, who fear that legalization would turn New Hampshire into a dark, lawless place. Legalization is at the heart of regional culture wars that equate marijuana use with the “excesses” of its southern neighbor. “We want to make sure we don't become Massachusetts,” said one senator, with “billboards on every street corner, marijuana shops on every street corner — and make it really accessible to kids.”

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But reformers held out hope that New Hampshire would finally legalize recreational marijuana in 2024. The state is no stranger to regulating cannabis: Medical marijuana has been legal for more than a decade. In keeping with that trend, the New Hampshire House of Representatives passed a legalization bill earlier this year, but the situation is very different in the state Senate. Now the Senate has passed a legalization bill—but one that differs from the House's on so many points that it seems as if it was drafted with rejection in mind. It could be a Pyrrhic victory for legalization advocates.

However, if the two houses can resolve the differences between the bills, New Hampshire could become the first state in the United States to implement a state-run cannabis system.

But that’s a big “if”.

This situation has arisen largely because Republican Gov. Chris Sununu pulled a fast one. Last year, when a state commission halted its work on developing a framework for recreational cannabis sales, the governor announced he would veto any bill that did not include placing the new system under the control of the New Hampshire Liquor Commission, which runs the state's liquor outlets. The bill would set a statewide cap of 15 franchises and implement a ban on lobbying and political donations by licensees.

According to a January report by Marijuana Moment, the governor told a marijuana lobbyist in the state, “Any other governor will tell you their system sucks.” He added, “We want to make it available, but controlled. That's it. That's what people want.”

Commission members were so baffled by this last-minute development that the report they sent to the state legislature contained no concrete recommendations.

Ultimately, the House stuck with a bill that would establish a retail licensing system, a 113-gram limit on possession and other significant changes from the governor's plan. The Senate version supported Sununu's franchise model and burdened the bill with must-haves like a 60-gram limit on possession and added new elements, like criminalizing cannabis use by drivers and passengers of vehicles, that seemed designed to derail the entire legalization initiative.

The biggest problem was the state's corporate plan, as no one could answer how the federal government or the courts would react. What legal dangers might New Hampshire face with a franchise system while cannabis is illegal at the federal level?

The Drug Enforcement Administration's potential reclassification of marijuana from Schedule I to the less restrictive but still problematic Schedule III doesn't necessarily help the state navigate the area, says Paul Armentano, deputy director of NORML, the marijuana legalization advocacy group. Marijuana would continue to be regulated in any case.

“For a state like New Hampshire, which is considering a unique system for dispensing marijuana to people over 21, a reclassification would not provide any clarity,” Armentano says, “because it would not resolve the existing conflict between the states' approach to marijuana and the federal government's regulations in its federal law.”

New Mexico, for example, which has state-run liquor stores, considered a similar structure for its marijuana stores. But lawmakers ultimately abandoned the idea before legalization two years ago because too many questions about potential legal issues, banking, product selection and training for state employees remained unanswered.

The New Hampshire House of Representatives is in a desperate situation. Its bipartisan coalition of legalization advocates is aware of the potential problems of a state system. They could potentially push a more restrictive bill than they would like and then try to find legislative solutions afterward. They also know that if they don't do this and a Republican takes over the governorship in November, legalization could be off the table entirely.

The Senate, meanwhile, wants what it wants. “The Senate essentially said, 'We will change the House version to be consistent with the governor's demands,'” says Armentano. “In addition, there were some members of the Senate leadership who did not want legalization at all and made that clear publicly.”

The House of Representatives will vote on Thursday on whether to reject the Senate proposal or refer it to a conference committee.

Even if New Hampshire moves forward, it's probably not indicative of how other Republican states will react on marijuana legalization. Armentano points out that Republican states like Montana, where voters passed a ballot initiative to legalize marijuana, are not considered paragons of marijuana policy — because the Republican Party largely opposes legalization. “You never hear a Republican talk about Montana being able to do that,” he says. “Montana hasn't descended into lawlessness, so maybe that's something I would reconsider — I've never heard that discussion.”

This year, voters in eleven states will vote on popular initiatives on medical or recreational marijuana. But voters in New Hampshire cannot take the route of direct democracy either. The state does not allow popular initiatives or referendums.

Anna Harden

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