New Hampshire Senate Meatgrinder

Once in the Senate, the masks all finally came off and Governor Sununu’s questionable devices and schemes surrounding the issue of cannabis legalization were now revealed for all to see.

After his Senate toadies tanked a fair and equitable legalization bill in 2023, the Governor famously announced the next day that although he was personally opposed, he believed it was inevitable and would be amenable to allowing it so long as it was “done right”. Turns out “done right” means an exclusive cannabis monopoly for a handful of his favored cronies and fat cat buddies and nothing for the rest of New Hampshire residents, including New Hampshire’s trailblazing four therapeutic cannabis licensees operating the seven heavily restricted and over-regulated medical dispensaries.

Almost immediately the hogs were lining up at the trough. One well-known Maine-based recreational dispensary teamed up with the NH Liquor Commission’s biggest landlord in an attempt to position themselves to snag up to three of the precious fifteen licenses to be awarded under the legislation passed by the Senate Judiciary Committee and headed to a vote by the full Senate.

As mentioned, the House bent over backwards in passing a bill trying to incorporate all the Governor’s nitpicking conditions into a still workable legalization framework, including a mechanism for attempting to implement his preferred but discredited and legally unviable ‘franchise store model’. This mechanism allowed the franchises to be downgraded to agency licenses in the event the franchise model collapsed under its own weight before being implemented, so at least New Hampshire still had a legalization framework to go forward with.

But this was not good enough for him and his Senate lickspittles. The provisions of what the Senate Judiciary committee passed feature something for everyone to dislike including jail time for 2nd and subsequent acts of public consumption; current medical cannabis dispensaries were to have no better chance at any recreational cannabis retail licenses than anyone else, so as likely as not will be ultimately forced to go out of business while a new tax of 15% will be imposed upon them to be passed along to their patients. only fifteen retail licenses were to be awarded but an individual can own up to three, so potentially five fat cats could own and control the whole industry; home growing of any kind remained illegal; last but not least, the Cannabis Advisory Board which was empowered to advise the Liquor Commission to make rules and regulate and support the industry’s safety and prosperity, unlike in the House version, would be cut in half, no longer have representation from anyone outside the Governor’s circle of cronies and anti-legalization advocates and be empowered to instruct and make binding rules rather than simply advise.

Passing this monopoly takeover model would be a slap in the face to the residents of New Hampshire who support a decentralized industry and economic opportunity.

Legalization isn’t about the lack of supply or saving some time on one’s drive to a dispensary. It is about economic opportunity for the people, sorely needed in an age where inflation is pushing the cost of everything sky high, and incomes are static. The average home price in the state has increased to over $520,000 in four short years and the average two family income needed to afford a home shot up from mid-$80,000 to over $116,000.

Not surprisingly both pro-cannabis and anti-cannabis stakeholders were now united in the Senate and House to kill this inequitable and offensive bill.

Nevertheless, the Governor’s Republican toadies joined with most Democrats in the Senate to ignore and discard the approved but already highly compromised House bill to pass this replacement hot mess and send it back to the House daring them to reject it, which to their principled credit they did.

WWII military slang defines a ‘blivet’ as ten pounds of manure in a five-pound bag. This is a kind description of the cannabis legalization bill approved by the New Hampshire Senate and overwhelmingly rejected by the New Hampshire House which essentially proposed to create a state monopoly on retail adult-use cannabis sales for fat cats and cronies, excluding meaningful participation by both the people of New Hampshire and the existing medical cannabis Alternative Treatment Centers (ATCs). The two chambers agreed to try to find a compromise solution by convening a Committee of Conference to iron out their differences before the end of the 2024 legislative session.

Last Chance for Compromise

For the past couple months leading up to this point, I had transitioned my counter messaging both in print and directly with state legislators from “the franchise model is illegal, unviable and risky” to “it’s a cartel bill intended to benefit Republican fat cats and cronies”. In fact, I even published a column entitled “Cannabis Cronies and Fatcats”. At the same time, the leading Democratic candidate for governor had begun including this perspective in her regular campaign messaging.

In between Senate passage of their ‘cartel’ bill and the scheduled Committee of Conference meeting, the Governor expressed concern to one of his colleagues in the Senate that the ‘cartel’ messaging was gaining traction, and it might be best to adopt a more accommodating posture during the upcoming conference, and if possible find a compromise that didn’t impact his core concerns, and thus avoid the issue negatively impacting Republican prospects in the upcoming election.

Referring to the version passed by the Senate, Governor Sununu said: “They put some other stuff in there that I wasn’t necessarily looking for, but they’re not deal breakers.”

The “other stuff” he was referring to included: jailtime for 2nd and subsequent convictions for public consumption including in-vehicle passenger consumption of edibles, a January 2026 effective date for legalization of private possession and consumption, no licensing preference for New Hampshire ATCs, 15% tax on medical cannabis sold by adult-use franchisees, and membership in the Cannabis Control Commission limited to regulators, law enforcement and legalization opponents.

The Senate redlines were limited to those expressly demanded by the Governor to earn his approval and signature, and included core provisions such as no more than 15 NH Liquor Commission-run franchised dispensaries, a ban on lobbying by franchisees, a cannabis control commission with the liquor commissioner as chair to promulgate rules and regulations, Liquor Commission control, licensing and enforcement of all aspects of the New Hampshire cannabis industry, a prohibition on home grow, a 15% fee on franchisee retail cannabis sales, prohibition on alcohol-infused cannabis products, restrictions on locations near schools, municipal opt-in required to locate a cannabis business in any city or town, limits on advertising, child-proof packaging, strict product labeling and warnings, product testing, one store limit per city or town except the larger cities of Nashua and Manchester, and prohibition of advertising or packaging that appeals to minors.

I then had a long telephone call with the Senator who had met with the Governor, who was also one of the Senate’s representatives to the conference committee and was able to determine the Senate’s exact negotiating position both in general and on specific provisions, and with his permission, briefed House leadership, including members of the House negotiating team.

Senate negotiators were prepared to bring “an open mind” to the conference committee regarding all this “other stuff” so long as none of the Governor’s redlines were not crossed. And yet knowing all this, the House negotiators on Tuesday meekly asked only to allow passengers holding cannabis patient cards to consume edibles while riding in a vehicle, that current NH medical cannabis operators receive token preference over other states’ operators, and that cannabis decriminalization be increased from three-quarters to one ounce during the 18 months until legalization were to take effect, as well as crossing one of the Governor’s redlines pointlessly asking to reduce the retail tax from 15% to 12.5%.

Afterwards, the senators could barely contain their astonishment at how little the House side was asking for. The House’s pathetic performance can be summed up by these comments from Wednesday session: “Help us out here, Jeb, help us out. Come on.” —Rep. John Hunt (R-Rindge) to Senate President. Jeb Bradley (R-Wolfeboro) who quipped “I’m not here to get people to vote for it.”

Then on Wednesday, while the Senate negotiators reminded the House that the 15% tax amount was a redline and non-negotiable, the House side proposed to add one or two token cannabis industry experts to the Control Commission’s 13-member monopoly bloc rather than the 10 included in the original House bill, while taking away the ATC’s right to convert from non-profit to for-profit companies regardless of whether they received an adult-use franchise, a right which was already uncontroversially enshrined in the Senate bill.

One of the House negotiators stated that they were in touch with the ATCs and they were fine with what the House negotiators were doing, which is flatly contradicted by their chief spokesperson’s on-the-record statement: “I wouldn’t say we are “happy” with any of this”.

All the House negotiators had to do was ask for the “other stuff” and it would have been largely or entirely accepted on the Senate side. Without basis, they rationalized that afterwards they could fix these glaring defects the following year. How exactly were they planning to unwind and claw back a year later the $8,000,000 allocated to the NH Liquor Commission to establish the state-controlled program? What guarantee had they that the next year’s Senate or Governor would concur? They inexplicitly squandered their true window of opportunity to create something that could actually be ‘fixed’ and improved later consigning the people of New Hampshire and the ATCs to scrounge for crumbs. Good public policy demanded that the full House vote the following week to consign this ‘blivet’ of a bill to the dustbin of history.

Instead nearly all the pro-legalization folks (state reps, senators, advocates and lobbyists) were ready to settle for a ‘few coppers’ in their tin cup, and a sprinkling of crumbs (aka: ‘caved’) when it came time to stand up for opportunity, prosperity and safety for the people of New Hampshire and oppose the complete takeover of a whole new industry by a dozen or so fat cats and cronies and their enablers.

Fortunately, many members of the House relied on my guidance in messaging and policy on this issue and were awaiting my decision whether or not to support it. One of the Republican senators supporting the bill spent a half hour a couple days before the House vote in June urging me to make a statement in its favor. In fact, he and I texted each other on the subject well past midnight the night before the vote. Representatives from national cannabis advocacy groups likewise were vigorously lobbying me into the early evening.

I refused to support the bill and as a result it narrowly failed in the House, consigning it to the aforementioned dustbin.

What’s Next for 2025 and Beyond

Prior to the November 2024 election, State Rep Jared Sullivan (D-Grafton) sponsored two cannabis legalization bills for the upcoming 2025 legislative session, one simply legalizing personal possession and private consumption with penalties for public consumption if Kelly Ayotte (R) became our next governor, and the other legalizing and regulating commercial commerce via licensed private-sector operators if Joyce Craig (D) won. Since Ayotte won, who vehemently opposes legalization, the commercial commerce bill is DOA, but since the NH Senate went from 14-10 Republican to (a veto-proof) 16-8 Republican majority and is even more hostile to cannabis legalization than the current Senate, in Rep Sullivan’s words the likelihood of passing even simple personal consumption next year has gone from possible to “slim to none”.

Conventional wisdom was that since Kamala Harris (D-CA) and her VP nominee Tim Waltz (D-MN) both come from states with liberal commercial cannabis legalization and had come out strongly in favor of ending federal prohibition, the odds favored this happening even before the next election in 2026. Since they lost, prospects for legalization on a federal level seemed to dim. President Donald Trump has sent mixed messages on the issue with consensus opinion that he is relatively indifferent to the issue and although probably wouldn’t be inclined to sign any executive orders liberalizing prohibition, he would likely sign a legalization bill sent to him after approval by Congress. But with the Republicans holding majorities in both houses of Congress, there is less than an even chance such a bill would reach his desk during the upcoming congressional session.

Even opponents acknowledge that the momentum of cannabis legalization is now inevitable and is slowly but steadily growing into a mainstream industry despite the roadblocks and setbacks that have bedeviled the industry since its inception over a decade ago. Although currently stymied by local and federal restrictions, there is substantial expectation that while some avenues are closed for now, alternative opportunities present themselves.

First, there is the wild card of RFK Jr’s appointment as Health & Human Services secretary with jurisdiction over both the FDA and CDC. As a presidential candidate, RFK Jr stated his commitment to cannabis legalization “on day one” of his presidency. There’s a good chance he’ll get behind pushing for common sense federal legalization and so it could happen as early as before the end of 2025, although more likely in 2027. Such a development could effectively pressure New Hampshire to jump on the bandwagon, perhaps as early as 2027.

At the encouragement of the current Biden administration, the Drug Enforcement Agency (DEA) was well along a formal process to ‘re-schedule’ cannabis from Schedule 1 to Schedule 3 on its controlled substance list. That would move cannabis from being included along with heroin and methamphetamine as prohibited and dangerous drugs with no medical use to the same category as Tylenol with codeine, and able to be prescribed by physicians and dispensed by pharmacies. If that happens, within a few years, we could see 100+ NH pharmacies dispensing medical cannabis against physician prescriptions. However, re-scheduling now seems at an impasse, and it may require presidential intervention to move it along.

Last but not least, since the very earliest a commercial legalization bill could now become law in New Hampshire is in two years, and it would take at least another three years for agency rule-making, licensing and opening the first adult-use dispensaries, the currently operating but fledgling NH medical industry will enjoy at least five years of effective market exclusivity to try to grow and strengthen their operations.

Over the last couple years, the medical conditions that qualify for a NH cannabis patient card have greatly expanded to include chronic pain, general anxiety as well as anything else a licensed DEA prescriber (physicians, nurse practitioners, dentists, podiatrists, optometrists, neuropathologists and physician assistants from neighboring states) certifies will do the patient’s condition more benefit than harm. Currently there are about 16,000 registered cannabis patients in NH with a population of 1.4 million. With this expansion of qualifying conditions and adequate messaging, reaching a goal of 100,000 patients within the next couple of years becomes realistic and would dramatically improve this sector’s long-term viability.

Four bills are working their way through the legislature in 2025. One bill (HB301) sponsored by state rep Suzanne Vail (D-Nashua) will permit outdoor cultivation in greenhouses which will dramatically lower their production costs to be more competitive with legalized border states. Although Governor Sununu vetoed a similar bill this year for technical reasons, Ms. Vail is cautiously optimistic it can pass in 2025. Another bill (HB54) sponsored by state rep Wendy Thomas (D-Merrimack) would permit the medical dispensaries (ATCs) to convert to ‘for-profit’ status, allowing them greater access to capital and increased revenue. A third bill (HB51) also sponsored by Wendy Thomas would permit medical dispensaries to re-sell non-intoxicating, hemp-derived cannabinoids (e.g., CBD, CBG and CBN) in addition to that which they produce in-house, bringing their pricing more in line with unlicensed smoke shops, convenience stores and gas stations. The fourth bill (HB190) sponsored by state rep Heath Howard (D-Stafford) would increase purchasing and possession limits for registered patients from two ounces to four ounces. This would allow patients who have difficulty traveling to make fewer trips to dispensaries.

Currently, cannabis patients are required to visit a dispensary to obtain their medicine but upon the dispensary operators’ request, their regulating agency, New Hampshire Health and Human Services (NH HHS) can update the rules to permit patient delivery, dramatically increasing access and convenience.

So overall, prospects for progress on legalization are not as grim as they might have initially seemed, with substantial and multiple opportunities on the medical side.