March 1, 2017

Unclear how much state knows about wholesale medical marijuana sales

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In New Mexico, lawmakers have debated acceptable uses of medical marijuana and some have questioned if cannabis producers are allowed to have enough medical cannabis to qualify as an “adequate supply” for patients.

While politicians and medical cannabis advocates in Santa Fe argue over appropriate plant numbers, getting actual numbers from the agency that governs the program is difficult—despite the fact that producers are required to use specific software to track all transactions.

Despite the plethora of debates and discussion, cannabis transaction data from the state is either unavailable or state employees do not know how to access it.

In almost every legislative discussion about New Mexico’s Medical Cannabis Program, producers and patients sell their respective claims on how much medical cannabis should be available in the state. Depending on what day and who is speaking, the state could be in a shortage that amounts to a crisis or have such a glut of cannabis that producers have to unload product to each other.

The New Mexico Department of Health oversees the cannabis program, regulating how much cannabis each producer can grow. But now, one Democratic state senator from Albuquerque is trying to affect procedure though statute instead of department rules.

Sen. Cisco McSorley’s SB 177 would put into law exactly how many plants each producer can have. If passed, the bill would expand producers’ plant limit to 1,000 each. That, coupled with a fairly broad patient expansion, alarmed one prominent producer.

Duke Rodriguez, who runs the medical cannabis company Ultra Health, has long been an outspoken opponent of DOH’s limit on production. Currently each producer can only grow 450 plants. Rodriguez told NM Political Report the medical cannabis program is the only industry that has a state-mandated limit on production.

“We have yet to tell the microbreweries how much they can brew,” Rodriguez said.

Other producers from around the state not only dispute that the shortages exist, but say there is such an excess of cannabis, producers sell products to each other wholesale.

Jarrett Hines-Kay sells cannabis exclusively to other producers through wholesale transactions as CEO of Seven Points Farms in Santa Fe. Hines-Kay wouldn’t say exactly how much cannabis he has on hand or how much he typically sells, but he did tell NM Political Report he hasn’t seen any signs of a shortage or a dwindling supply.

“It’s hard for me to see that,” Hines-Kay said.

Erik Briones, who operates the Minerva Canna Group, also disputed there is a shortage of cannabis.

“I made a few phone calls and out of four producers there’s easily 5 pounds wholesale [available],” Briones said.

Anecdotes aside, actual data about how much and how often cannabis is sold wholesale could prove helpful weeding through the rhetoric.

Opinions and even data are likely to differ when polling patients and producers, but most agree that the program’s governing agency, DOH, should be able to provide objective data regarding wholesale cannabis sales.

But if DOH responses to NM Political Report are indicative of what is being tracked by the department, more speculation is likely to follow.

NM Political Report repeatedly emailed and called two different DOH spokesmen and the medical cannabis program manager, yet received only limited information.

One spokesman said the department allows wholesale transactions, and added that producers consider the number of plants, the yield per plant and harvest schedule when deciding to exchange products on the wholesale level.

Producers in New Mexico are required by DOH to use software from a Florida company to track sales, purchases and on-hand inventory. The company, BioTrackTHC, boasts on its website its “comprehensive product suite increases transparency and accountability by monitoring key data points during cultivation, harvest, extraction, packaging, transport, and dispensing.”

Briones said he knows first hand how strict DOH is when it comes to requiring producers to account for their respective products.

“We can not transfer a gram without a manifest,” Briones said.

While Rodriguez and Briones may disagree on plant limits, they both say DOH has the wholesale data.

“It does exist in BioTrack,” Rodriguez said.

In lieu of personal responses from DOH, NM Political Report filed a public records request for any and all documents regarding wholesale transaction reports. In a manual for BioTrackTHC software, a “Wholesale Transaction Report” is specifically mentioned. But the department responded saying they had no such records. State law does not require public entities to create reports specifically for a records request.

In a second, more broadly worded, records request NM Political Report asked for any documents related to wholesale transactions.

In response, DOH provided memorandums of understanding and letters from producers to the department stating the intention to take part in inter-producer business.

This week, DOH updated its quarterly report of producers and plants. The report includes how many patients were served, an estimate of how much product was sold and an educated guess of how much cannabis is being sold for. Nowhere in the report is a mention of how much producers are selling to each other.

For now, conflicting claims and reports by producers may continue. But, Briones said DOH has to have records regarding wholesale transactions.

“They’re not being honest with you,” Briones said.

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