Cannabis providers try to navigate a new industry

While the New Mexico Regulation and Licensing Department scrambles to fully implement regulations for non-medical cannabis, those who plan to get into the new industry as well as those already in the medical cannabis industry are already trying to navigate proposed rules.  With an April 2022 deadline to have a fully implemented adult-use cannabis program, […]

Cannabis providers try to navigate a new industry

While the New Mexico Regulation and Licensing Department scrambles to fully implement regulations for non-medical cannabis, those who plan to get into the new industry as well as those already in the medical cannabis industry are already trying to navigate proposed rules. 

With an April 2022 deadline to have a fully implemented adult-use cannabis program, RLD has posted proposed rules that will be considered on June 29, the same day the recently passed Cannabis Regulation Act goes into effect. But that also means current medical cannabis producers and those industry hopefuls are combing through the proposed rules, watching local zoning proposals and hoping to get the ear of regulators and elected officials. 

Matt Muñoz and his business partners are just several of many who are watching the process closely in order to better understand proposed rules and regulations and be prepared to hit the ground running. 

Muñoz is finishing his last few weeks of work in the University of New Mexico’s Office of Government & Community Relations while he and his business partners plan for deadlines and shape their business to comply with state regulations. During legislative sessions, Muñoz serves as a lobbyist for the university and he said that work has connected him with lawmakers as well as various department staffers. But he said not everyone has the advantage of knowing who to call with questions or concerns. 

“One of the benefits of where I’ve come from with the lobbying world is, I do have those connections,” Muñoz said. “I can help our small business figure this out, but the average New Mexican isn’t going to have that same ability that I have just because I have the connections from being at the Legislature for 10 years.”

Muñoz and his partners already registered their business, Carver Family Farms, with the New Mexico Secretary of State’s office and plan to get a cannabis microbusiness license which would allow them to grow up to 200 cannabis plants. The idea of creating a microbusiness classification was touted by some lawmakers as a pathway for those who want to get into the cannabis industry but don’t plan on mass producing cannabis. And while Muñoz readily acknowledges that getting licensed as a microbusiness is less costly than other avenues, he said he and his business partners will likely end up spending hundreds of thousands of dollars on setting up their business in addition to the few thousand dollars to the state. 

“I think the idea that the microbusinesses are going to be able to produce cannabis at a lower barrier of entry is, I don’t want to say it’s a fallacy, but I don’t think it’s completely accurate, because our business plan has the three of us not getting paid until May of next year.”

Superintendent of RLD Linda Trujillo has said that the proposed rules are not set in stone and that some things may change and deadlines may be met early. Muñoz said that fluidity sometimes causes more problems than it helps for small businesses like his. 

“I mean, they’re building the airplane as they’re flying it,” Muñoz said. “And I understand that and respect it completely. They have a short timeframe to get this new department up and running.”

Muñoz said while it seems current medical cannabis producers who have been in business, in some cases more than 10 years, those still trying to get a foothold are not consulted. 

There are some things in here that they’re talking to the experts about, but they’re not talking to us microbusinesses and other people to see how this is going to affect our business models as we’re trying to get this set up.”

On top of deciphering rules and regulations on the state level, Muñoz and his partners, along with current producers, have their eyes on local zoning ordinance proposals like the one the Albuquerque City Council is considering. Albuquerque Mayor Tim Keller and some members of the city council have dismissed concerns that the proposal would overly restrict where cannabis dispensaries can operate, but Muñoz said he’s still concerned that the City of Albuquerque may end up zoning cannabis businesses more restrictively than liquor stores and bars. 

“They should look at [alcohol and cannabis] as equals and not ‘one is worse than the other’ because I think that war on drugs mentality, that pot is still bad, isn’t going to move the industry forward and normalize it,” Muñoz said. 

And Muñoz and his partners are far from the only ones who have concerns about the city’s proposal. 

Zoned out

The Albuquerque City Council is set to consider a zoning code amendment that, some cannabis producers say, may effectively push current dispensaries out of their current locations. Indy White, president of the New Mexico Cannabis Chamber of Commerce and part owner of cannabis producer PurLife, said part of the proposal that would prohibit dispensaries from being 300 feet from areas zoned as residential could have a significant and negative impact on current medical cannabis producers. 

“We’ve seen that that would limit about half of the number of the dispensaries that are currently open from being able to function the way that they currently do, primarily because of that distance from a residential area,” White said. 

He added that three of PurLife’s Albuquerque locations might be in “jeopardy” if the current proposal passes without any changes. 

During both the regular and special sessions earlier this year, some lawmakers who were hesitant or opposed to cannabis legalization raised concerns that the Cannabis Regulation Act didn’t go far enough in allowing counties and municipalities to essentially zone out cannabis businesses. Those lawmakers argued that some more rural counties may not want legal cannabis sales in their area. 

White said he is worried Albuquerque might be setting a precedent for other areas of the state. 

“If this is the type of zoning that we’re going to have to deal with, I can only imagine what some other municipalities may feel that they have the liberty to do,” White said. 

Duke Rodriguez, the president and CEO of cannabis producer Ultra Health, said he is also worried about Albuquerque’s proposal, especially, Rodiguez said, since the city could benefit the most from cannabis tax revenue. 

“I think it’s very disingenuous to have one hand out, looking for these additional receipts that the city of Albuquerque desperately needs and holding a stick in the other hand,” Rodriguez said. “So while it’s only a proposal, I hope that we review that proposal with consideration for all the implications.”

Trying to get it right

White said he and the Cannabis Chamber of Commerce are generally happy with how things are rolling out from RLD and its newly formed Cannabis Control Division, adding that there has been “an open line of communication” with RLD. 

White said he’s hoping for more clarification on whether RLD plans to limit cannabis production through plant limits or space limits, or canopy space. He said Trujillo told him and other producers that both canopy limits as well as plant limits were included in the proposed rules as a sort of a placeholder and that the department would get input from stakeholders before deciding on one or the other. White said he personally prefers to see a canopy model instead of plant limits. 

Rodriguez has a longer list of concerns than White. 

Rodriguez said he is still trying to get clarification on certain aspects of the proposed rules, like whether or not his company will have to fire staff who are between the ages of 18 and 21 in June or next year. The state’s current medical cannabis law allows those 18 years of age or older to work in a dispensary, but the Cannabis Regulation Act raised that age to 21 or older. Rodriguez, who has long been a proponent of raising production limits, if not doing away with them completely, said he is still unclear exactly how the fee structure for larger producers will work. For example, Rodriguez said, there are two different per-plant fee structures: one for medical cannabis and one for non-medical cannabis. But Rodriguez said the rules are unclear as to whether a producer selling both medical and non-medical cannabis would pay both per-plant fees or just the one for non-medical cannabis. 

Rodriguez said he’s also seeking clarification on what the maximum fees are. One section of the rules states that no producer will be charged more than $125,000 in fees, but Rodriguez said a producer with 35 locations (Ultra Health has 28) could easily surpass $125,000 in fees. 

“I believe that the cap is $125,000,” Rodriguez said. “I’m probably wrong in the eyes of the RLD.”

Rodriguez also said he would like to see the new program up and running before the end of the year. 

“My hope is that we consider an April 1 start date for those non-medical sales to be a failure, not a success,” Rodriguez said. “I think we should be patting ourselves on the back if we can make it before the end of calendar year ‘21, and there are sufficient supplies on the shelves of producers and retailers and adult sales have actually been initiated and medical patients have not been compromised, then we can talk about a successful launch.”

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Lujan Grisham pocket vetoes two bills

Lujan Grisham pocket vetoes two bills

Gov. Michelle Lujan Grisham pocket vetoed two bills the legislature passed this legislative session: one changing the Cybersecurity Act and the other concerning law…
Gov signs bills with some vetoes 

Gov signs bills with some vetoes 

Gov. Michelle Lujan Grisham signed 69 bills that the legislature passed during the 2024 legislative session. These included the General Appropriations Act which contains…
Guv signs state budget

Guv signs state budget

Gov. Michelle Lujan Grisham signed the budget bill for Fiscal Year 2025 and the Capital Outlay spending bill. The FY25 state budget bill passed…
State fines oil company more than $2 million after spill

State fines oil company more than $2 million after spill

The Energy, Minerals and Natural Resources Department fined an oil and gas company operating in the Permian Basin more than $2 million over produced…
PRC denies request to build LNG storage facility

PRC denies request to build LNG storage facility

The New Mexico Public Regulation Commission unanimously rejected a request by the New Mexico Gas Co. to build, own and operate a liquified natural…
NM Supreme Court upholds Community Solar Rule

NM Supreme Court upholds Community Solar Rule

Hours after the New Mexico Supreme Court heard arguments in the investor-owned utilities’ appeal of the community solar rule, the justices upheld the regulations…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Lawmakers must find consensus on competing education spending plans

Lawmakers must find consensus on competing education spending plans

By Margaret O’Hara, The Santa Fe New Mexican A challenging task awaits New Mexico lawmakers in the next 30 days: Reconciling three very different…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Proposal to curb executive powers moves to House Judiciary

Proposal to curb executive powers moves to House Judiciary

The House Government, Elections and Indian Affairs Committee discussed a potential constitutional amendment that seeks to limit the governor’s executive powers. The committee approved…
Supreme Court censures attorney over conduct in anti-COVID policy suits

Supreme Court censures attorney over conduct in anti-COVID policy suits

The New Mexico State Supreme Court censured a New Mexico attorney because of her “misconduct” in two unsuccessful cases pushing back on COVID-19 regulations…
Supreme Court to hear two abortion cases this spring

Supreme Court to hear two abortion cases this spring

Later this month, the U.S. Supreme Court will hear oral arguments on the case against the abortion medication mifepristone. It will hear a second…
How Biden, others highlighted reproductive rights at the State of the Union

How Biden, others highlighted reproductive rights at the State of the Union

President Joe Biden highlighted reproductive rights issues as part of his State of the Union speech Thursday. Biden delivered his 2024 State of the…
Stansbury invites OB-GYN doctor as her state of the union guest 

Stansbury invites OB-GYN doctor as her state of the union guest 

U.S. House of Rep. Melanie Stansbury has invited an OB-GYN doctor from Roswell as her guest for President Joe Biden’s State of the Union…
Supreme Court to hear two abortion cases this spring

Supreme Court to hear two abortion cases this spring

Later this month, the U.S. Supreme Court will hear oral arguments on the case against the abortion medication mifepristone. It will hear a second…
How Biden, others highlighted reproductive rights at the State of the Union

How Biden, others highlighted reproductive rights at the State of the Union

President Joe Biden highlighted reproductive rights issues as part of his State of the Union speech Thursday. Biden delivered his 2024 State of the…
Stansbury invites OB-GYN doctor as her state of the union guest 

Stansbury invites OB-GYN doctor as her state of the union guest 

U.S. House of Rep. Melanie Stansbury has invited an OB-GYN doctor from Roswell as her guest for President Joe Biden’s State of the Union…
See who’s going to be on your primary ballot in June

See who’s going to be on your primary ballot in June

Tuesday marked the official beginning of the 2024 New Mexico primary season for the legislature, with candidates officially filing for candidacy. This is the…

Bill to require disclosure of use of AI in campaign materials goes to governor

The Senate approved a bill aiming to require the disclosure of the use of artificial intelligence or other changes made by computers to campaign…
House amends, passes bill banning firearms near polling places

House amends, passes bill banning firearms near polling places

The House narrowly approved a bill that would ban firearms near polling places. The House voted 35-34 to pass the bill following an extensive…
U.S. Supreme Court lets ban on Couy Griffin from holding office stand

U.S. Supreme Court lets ban on Couy Griffin from holding office stand

The U.S. Supreme Court declined to hear an appeal of a Republican official who was barred from holding office after being convicted for a…
Politics Newsletter: legislative leaders not running for reelection

Politics Newsletter: legislative leaders not running for reelection

Hello fellow political junkies! Candidate filing day has come and gone, and members of House and Senate leadership opted to either not seek reelection…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…

GET INVOLVED

© 2023 New Mexico Political Report