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New Mexico Gov. Michelle Lujan Grisham announces her decision to sign a law that legalizes recreational marijuana outside the state Capitol building in Santa Fe, N.M., on April 12.Morgan Lee/The Associated Press

New Mexico will provide business loans of up to US$250,000 toward small-scale cannabis businesses in an effort to provide economic opportunity to communities that were hit hard by past criminal enforcement of marijuana laws.

The Regulation and Licensing Department on Thursday announced that the loan program is moving forward, after a legislative panel provided approval this week.

The New Mexico Finance Authority is planning for a US$5-million line of credit for cannabis entrepreneurs, with an average loan size of about US$100,000. The application process is expected to open in February.

Loans would be available to qualified cannabis “microbusinesses” that are licensed to cultivate and sell marijuana from up to 200 plants at a single location, operating much like a craft winery or brewery.

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That business niche was authorized in sweeping legislation to regulate and tax recreational marijuana sales, signed by Democratic Gov. Michelle Lujan Grisham earlier this year. Recreational cannabis sales commence by April 1, 2022.

Terms of the small business loans will extend for up to five years with interest rates from two per cent to three per cent.

New Mexico Finance Authority CEO Marquita Russel has noted that traditional business loans are still scarce for small-scale cannabis entrepreneurs.

New Mexico has emphasized social and economic fairness as it prepares to legalize and tax sales of recreational cannabis.

Marijuana possession and growing remains a federal crime, despite changes in state and tribal law. And a recent federal raid on a household marijuana garden on tribal land in northern New Mexico has renewed worries about U.S. drug enforcement priorities.

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