New Mexico was a pioneer in the U.S. for legalizing some forms of medical cannabis in 1978 under the Controlled Substances Therapeutic Research Act. By 1986, 250 cancer patients had received cannabis through the Lynn Pierson Therapeutic Research Program. In April 2007, the Lynn and Erin Compassionate Use Act was signed into law by Governor Bill Richardson, allowing cannabis for medicinal purposes to qualified patients. Initially starting with a small list of only eight qualifying conditions, the state has expanded to include 28 conditions eligible for medical marijuana. Standing out in the list is the addition of an autism spectrum diagnosis, which is currently only recognized as a condition in 17 of the 33 medical cannabis states. New Mexico joined the many states establishing criminal reformations by decriminalizing cannabis in 2019 when Governor Grisham signed Senate Bill 323. Under this law, a first-time possession offense is punishable by a $50 fine and considered a petty misdemeanor. The enactment of SB 323 also made New Mexico the first state to decriminalize the possession of drug paraphernalia.  

Governor Michelle Lujan Grisham signed House Bill 2, known as the Cannabis Regulation Act, on April 12, 2021, making New Mexico the 18th state to legalize adult-use cannabis and the fifth state to do so through the legislative process rather than through a voter initiative. Under this bill, adults 21 and over may legally purchase two ounces of cannabis flower, 16 grams of cannabis extract, and 800 milligrams of edible cannabis at any one time and may personally cultivate six mature and six immature plants. Retail sales of cannabis will apply a 12% excise tax in addition to regular sales taxes. The excise tax will increase 1% each year beginning in 2025, until reaching 18% in 2030.