UPDATE: New Hampshire House Passes Adult-Use Cannabis Bill

UPDATE: New Hampshire House lawmakers passed H.B. 1633—to legalize, tax and regulate adult-use cannabis—via a 239–141 vote on Feb. 22. The legislation now heads to the Senate, where a previous version was rejected last year. 

New Hampshire could join its New England peers and become the 25th state in the nation to legalize adult-use cannabis with House lawmakers set to take up legislation Feb. 22 on the chamber’s floor.

The measure, House Bill 1633, would establish a regulated and taxed marketplace allowing those 21 and older to purchase and possess up to 4 ounces of cannabis flower, 10 grams of concentrate or 2,000 milligrams of THC from one of 15 licensed dispensaries in the state, according to the bill.

And although the legislation has bipartisan backing, with six Republicans and three Democrats signed on as sponsors, the devil is in the details for House lawmakers to put forward legislation that will gain traction in a historically resistant Senate and please a governor who has pledged his support for an adult-use program as long as certain conditions are met.

The House passed a similar version of the legislation last year only for it to be rejected in May by Senate lawmakers. The next day, Republican Gov. Chris Sununu released a statement outlining requirements for future legislation to avoid his veto pen.

“NH is the only state in New England where recreational use is not legal,” Sununu wrote. “Knowing that a majority of our residents support legalization, it is reasonable to assume change is inevitable. To ignore this reality would be shortsighted and harmful. That is why, with the right policy and framework in place, I stand ready to sign a legalization bill that puts the State of NH in the driver’s seat, focusing on harm reduction— not profits.”

Following last year’s defeat, a legislative commission tasked with studying a state-run model for adult-use sales concluded its review in November but without making an official recommendation. While the nine-member commission originally discussed licensing up to 67 dispensaries to mirror the number of state liquor stores, Sununu subsequently proposed a “nonnegotiable” cap of 15 retail facilities, the New Hampshire Bulletin reported. 

And while Sununu also called for a state-run model, the commission transformed that vision into a “franchise model” in which dispensaries would be independently owned but regulated in a fashion where the state’s Liquor Commission would be the franchisor and in control of certain aspects of each operation.

Although H.B. 1633 sticks to Sununu’s proposed 15 dispensaries for an initial program rollout, this year’s legislation leaves the possibility of adding more stores in the future should some regions of the state need additional access points to help eliminate the unregulated market, Rep. Erica Layon, R-Derry, one of the bill’s sponsors, said Feb. 13 during a Commerce and Consumer Affairs subcommittee hearing.

“Evaluating the number of stores is a good way to make sure that we meet that stated goal of the governor to reduce access to illicit market cannabis tainted by fentanyl and to reduce the other harms that come from that,” she said. “If the first 15 stores just pop up in the Southern tier, there might be a reason to make sure that people in the north country aren’t left to cross the border or turn to the streets.”

Editor’s note: While lawmakers often claim unregulated cannabis is being laced with fentanyl, Dr. Tasha Turner-Bicknell, an associate professor at the University of Cincinnati’s College of Nursing, saidfollowing Ohio’s November 2023 election that through her research as an overdose prevention expert with Harm Reduction Ohio, she has been unable to find proof that fentanyl is being found in cannabis.

The legislation passed through the full committee via a 17-3 vote the following day and is now scheduled for full House consideration on Feb. 22.

While H.B. 1633 was amended in committee in an attempt to create a path to enactment, the legislation veers from the governor’s proposed state-run model as well as the franchise model considered last year by the legislative commission. Layon said last week she fears such a model would not have the transparency needed for public trust.

“I think that when we set up a system like this, public trust is the most important thing that we need to keep,” she said in committee, adding that public safety and accountability are also priorities. “And then nobody’s wondering why a particular operator got the license.”

When only a select few are able to participate in a limited-license market, then the process must be transparent, Layon said.

Sununu also wanted to incorporate a ban on lobbying and political contributions by cannabis licensees, but Layon said H.B. 1633 veers from this request, too, adding that the solution to minimizing the governor’s concerns on this front is to set up a program with a better “paradigm.”

“By doing … a highly regulated and transparent process, we're able to remove some of that squish factor from decisions where, in the rulemaking, the Liquor Commission will lay out what they're looking for and how they’re judging people,” she said, adding that transparency in administrative rules should help eliminate biases in picking favorites.

In addition to trying to satisfy the governor’s checklist, Layon said many changes made to H.B. 1633 since its January introduction were done so with the intent of advancing legislation that can attract broad support in the Senate. 

Under H.B. 1633, the state’s existing medical cannabis dispensaries, known as alternative treatment centers (ATCs), would not be automatically licensed for adult-use sales but rather eligible to receive an adult-use license through a competitive process; however, “successful” ATCs would be given preferred scoring in the licensing process.

There are currently three licensees operating seven ATCs in New Hampshire.

“Instead of giving a guarantee, we need to ensure that they can compete for these [adult-use licenses] and that one of the factors that’s recognized in the application process is that if somebody has operated a successful alternative treatment center in the state, that that should be one of the factors under consideration,” Layon said. “So, it’ll be one extra little tally in their court, because they’ve been here, they’ve done this market, they provided access to our patients, but it won’t be the only deciding factor.”

One of the “highly contentious” issues with H.B. 1633 revolved around penalties for smoking cannabis in public, Layon said. While the original bill didn’t include a misdemeanor punishment for such violators, Layon said she compromised with Senate lawmakers:

• First-time offenders would be subject to a civil violation and forfeiture of all cannabis and cannabis products on their person;
• Second-time offenders within a five-year period would be subject to a $500 fine and forfeiture of all cannabis and cannabis products on their person; and
• Those with additional offenses within a five-year period would be subject to a misdemeanor with the possibility of jail time.
  

“It would make sense that if somebody just keeps flagrantly violating our law and getting caught, then maybe some jail time should be on the table,” Layon said. “It’s a nonstarter over in the Senate if we don’t have it as just a misdemeanor as opposed to a Class B [misdemeanor].”

The legislation would also establish a cannabis fund from adult-use tax revenues that would pay for administrative costs associated with a legalized program as well as an annual study related to the health impacts of a regulated marketplace.

The remaining funds would be used to support education programs; substances-use prevention, treatment and recovery programs; community reinvestment projects such as water and sewer access; behavior health programs; broad-based aid to municipalities that have dispensaries; affordable housing projects; and public safety agencies for costs associated with drug recognition experts.

Originally, the legislation called for 55% of the leftover funds to be disbursed into the New Hampshire Retirement System to reduce its unfunded accrued liability. But that provision was removed in committee Feb. 14 with more revenue now set aside for education.

“Apparently a lot of people don’t want their pensions paid for by pot,” Layon said. “And since we’ve been talking about all these different issues of … just trying to make sure that we’re not creating new problems with the federal government, having that be the primary place that money goes doesn’t really make sense.”