US (NM): Water rights create hurdles for cannabis growers

The New Mexico adult-use cannabis market is preparing to spring into action within the next few months. But lack of direction on regulations regarding ownership of water rights is holding back some entrepreneurs looking to take part in the marketplace. With only weeks left until regulators must begin processing cannabis business license applications, there are still some unanswered questions about water rights that need answering.

While New Mexico’s temperate weather and long growing season in many ways make it the perfect place to grow cannabis, the state has been in the throes of a record-breaking drought. Last year’s rainfall in Carlsbad was the lowest since the Weather Service opened its station there in 2005, and weather scientists say that the western U.S. is suffering through a 20-year “megadrought”—the worst in 1,200 years, according to a study published in the journal Science. Current projections predict that the crisis is far from over, and the megadrought is expected to continue for years.

This is terrible news for potential recreational cannabis producers in New Mexico who are required by the state to prove that they have rights and access to an adequate supply of water before they can be licensed to grow cannabis for commercial sale. Water access will be expensive and hard to come by as the drought continues, and if state regulators choose to adopt stringent water rules, it could keep prospective pot businesses from ever taking off.

The state Regulation and Licensing Department has yet to finalize its rules for licensees, but the state already has manufacturing standards for medical cannabis that require producers to use “potable” water in their grow operations. If recreational growers are subjected to the same standards, many rural farmers who use well water or have irrigation rights only—both of which are safe for plant production—will have to find other sources of water or forget about joining the industry altogether. Producers located in the larger metropolitan areas of the state will be able to access the municipal water supply, but the cost will cut into overhead. Rural producers without water rights will be forced to purchase or lease rights before they can start operations.


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