Questions, criticisms dog bill for state monopoly of marijuana sales
Mar. 3—CONCORD — A proposal that would make New Hampshire the first state to control, price and sell marijuana faced questions and criticism during its second public hearing Thursday.
The bill, HB 1598, would authorize the State Liquor Commission to set up 10 or more retail stores to sell marijuana to people 21 and older.
Critics questioned the bill's profit projections, limits on edibles and creation of a state-run bank for legal marijuana transactions if private industry were unable to handle them.
Rep. Daryl Abbas (R-Salem), the bill's prime author, said a state bank was a "Plan B" and would only take place if the SLC concluded these marijuana sales could not be processed through existing banks.
New Hampshire Bankers Association President Kristy Merrill said her powerful lobbying group "strongly opposes" the formation of a state-run bank.
Merrill said this state-run bank, as designed, would be so risky it would not be able to obtain federally issued insurance to cover its deposits or a master account from the Federal Reserve that every traditional bank must have to issue checks and make investments.
"There would be no ability to do business other than in cash," Merrill told the House Ways and Means Committee, which took four hours of testimony on the measure.
While marijuana sales are against federal law, Merrill said 600 banks and credit unions across the country are processing transactions for cannabis business in the 18 states and District of Columbia where recreational use is legal.
"We don't believe a state bank is needed," Merrill said.
Skepticism of profit claims
Many members of this tax-writing committee sounded skeptical of Abbas' estimate that a state-run industry could produce $250 million to $300 million a year in net profit.
Abbas said that's possible because unlike other states, New Hampshire would not tax marijuana.
All profit would come from the difference between what the state would pay to acquire the product versus the retail sale, a successful business model in the state control and sale of liquor, Abbas said.
The markup for selling marijuana in this way would be much higher than alcohol, but any profit estimate is just a guess, Abbas said.
"To give you a specific figure would not be genuine," Abbas said.
Former House Ways and Means Chairman Susan Almy, D-Lebanon, answered, "Well, your estimate seems awfully high."
Limits on edibles
Several speakers sharply attacked the bill's treatment of marijuana edibles.
As written, the bill permits sale of edibles only to customers already enrolled in the state's medicinal marijuana program. These are patients with an eligible medical condition and a state-issued card who can now buy cannabis at one of seven non-profit "alternative treatment centers" outlets that sell it.
Edibles are the fastest growing part of the legal marijuana sales market because many don't want to inhale marijuana, said State Rep. Timothy Egan, D-Sugar Hill.
"You are leaving huge amounts of money on the table," Egan warned.
Paul Morrissette, a principal in East Coast Cannabis, an Eliot, Maine business, said 50% of his recent sales were in edibles, which were especially popular for those over 50 who take them to help them sleep.
"This bill would be like having a bar that doesn't sell beer," Morrissette said.
Abbas
called the restriction one of many compromises he made to craft a bill he hoped could make it through the Republican-led Legislature.
Other committee members questioned why the bill would give the first $25 million in profits to support for substance abuse and mental health-related treatment when the state already has an "alcohol fund" that comes from liquor sales.
The bill earmarks 90% of the rest of the profit to cut the state's share of property taxes paid by homeowners and businesses.
Canada's example
While no state has controlled marijuana sales, two Canadian provinces looked into it with unimpressive results, said Rep Susan Homola (R-Hollis), who opposes the bill.
Quebec already has abandoned the idea, and the costs for the state-managed program in Ontario were more than double the revenues, she said.
"Perhaps we should examine Canada's risky experiment before we engage in our own," Homola said.
Last month, the House initially supported the bill by an impressive 235-119 margin, though individuals' votes weren't recorded.
The House has passed a marijuana legalization bill in some form about a half dozen times in the past decade, but none has ever cleared the State Senate.
New Hampshire has decriminalized possession of small amounts of marijuana and expanded medicinal marijuana since Chris Sununu became governor.
In the past, Sununu has opposed recreational sale of marijuana and was even more militant against the idea at the height of the opioid epidemic.
