July 21, 2020

Another medical cannabis company joins in legal action against the state

A second medical cannabis company has filed a petition asking a state district judge to invalidate rules recently enacted by the New Mexico Department of Health. 

Pecos Valley Production, a medical cannabis company with dispensaries in the southern part of the state, filed a petition Monday in state district court calling for an annulment of regulatory rules that lawyers for the company called “arbitrary and capricious.”

The petition from Pecos Valley argues similar points as one filed last week, on behalf of cannabis producer and manufacturer Ultra Health. Both petitions are filed under the same case.

Lawyers for Ultra Health, one of which is Brian Egolf, who also serves as the state’s Speaker of the House, argued that the Medical Cannabis Program and the DOH failed to show reasoning for new rules. Ultra Health’s lawyers also accused the state of copying regulations from other states that have a medical cannabis program like Oregon and Colorado. 

The petition from Pecos Valley Production also accused the state of adopting rules from other states instead of properly consulting with medical cannabis producers in New Mexico.

“These industry participants are well versed in the day-to-day operations of the New Mexico medical cannabis industry and therefore are more likely to provide relevant New Mexico specific evidence than the standards cut and pasted from other states,” the second petition reads.

Also like the Ultra Health petition, the court filing from Pecos Valley argued that the DOH failed to consult with the state’s Small Business Regulatory Advisory Commission to determine whether the rules create “an unnecessary burden on small businesses.”

Lawyers for Pecos Valley Production also accused DOH and the Medical Cannabis Program of not making technical aspects of the rulemaking procedure public. 

“Simply put, NMDOH failed to provide the necessary information to the public in the beginning of the rulemaking, and then it engaged in a post hoc rationalization of the rule provisions in violations of its statutory obligations,” Pecos Valley Production’s lawyers wrote. 

The company’s lawyers also wrote that a records request they sent to the DOH asking for the rulemaking record was delayed. But, they added, once that request is fulfilled the rulemaking record “will demonstrate it is replete with technical information that the NMDOH failed to provide in the initial notice published in the New Mexico register.”

The new rules were adopted last month, but were first proposed last October. After a meeting in November and another one in January, the department promulgated the rules, which include provisions for patient reciprocity and consumption areas as well as testing and labeling standards. But lawyers for both Pecos Valley Production and Ultra health said their clients do not take issue with rules surrounding those provisions. 

A spokesman for the DOH previously told NM Political Report the department does not comment on pending legal matters.