April 3, 2017

DOH and cannabis producer have their day in court

A New Mexico state agency and a medical cannabis company argued in a state district court Monday morning whether the state’s punishment of the company was warranted.

Santa Fe District Court Judge David Thompson heard from both the state’s Department of Health (DOH) and a lawyer representing medical cannabis producer New Mexico Top Organics-Ultra Health about whether the company will have to shut down retail operations for five days later this month.

The department claims Ultra Health violated the state’s medical cannabis program rules by moving a plant out of their approved growing and retail facilities and into the public.

The pending sanction is a result of a cannabis plant Ultra Health used in an exhibit at the New Mexico State Fair last September. The plant Ultra Health brought to the State Fair was non-flowering, meaning it was not mature enough to be used for consumption..

The department ordered Ultra Health to halt all sales for five days last fall, but the punishment was delayed after Ultra Health appealed the decision. Ultra Health filed a motion to stop the sanction, arguing the punishment is unjust and the company would see irreparable harm as a result. Both parties eventually argued their cases to a hearing officer.

Santa Fe attorney and New Mexico Speaker of the House Brian Egolf, a Democrat, represented Ultra Health in court on Monday. Egolf asked Thompson to reject the sanction, arguing the plant in question was not mature enough for production and that his client would see a significant loss of business, especially over the new proposed dates.

Last month, DOH secretary Lynn Gallagher ordered the company to close its doors from April 17 to April 21, which encompasses what Ultra Health calls “the biggest cannabis purchasing day of the year,” April 20, or 4/20.

The number 420 is often associated with cannabis use.

Egolf argued the punishment was comparable to businesses that violate health codes.

“It’s not like they need to shut down a restaurant because the kitchen is dirty,” he said.

Ultra Health’s clients, Egolf said, would be “disrupted in their routine” and may risk not having medicine for those five days.

DOH’s lawyer Chris Woodward said patients wouldn’t be adversely affected because there are other cannabis producers in the state.

“This is a relatively free market and patients can go wherever they want,” Woodward said.

Ultra Health’s Director of Operations Leigh Jenke testified shutting down retail operations would create a backstock of product and could cause other issues.

“There would be a storage problem and that could open us to possible safety problems,” Kenke said.

Kenny Vigil, who manages the state’s medical cannabis program, testified that Ultra Health has complained in the past that the company is on the verge of a cannabis shortage. Vigil also said the five-day shutdown is a suitable punishment for Ultra Health.

In an answer to Egolf, Vigil revealed that the punishment may be a message to other producers who think about breaking a similar rule.

Egolf asked Vigil what harm the state department may suffer if the judge decides to stop the sanction.

“It could also make other [medical cannabis] producers wonder, ‘Maybe we can get away with something,’” Vigil said.

Thompson said he would issue a ruling by the end of the week.