November 27, 2021

Emails show exchanges between plaintiffs, employees and RLD that helped lead to whistleblower suit

Next week, a New Mexico state district judge is slated to hear arguments for and against a group of state employees adding a Whistleblower Protection Act claim to an already pending lawsuit against the state’s Regulation and Licensing Department. 

The initial suit, filed by four Cannabis Control Division employees, claims that the department and the Cannabis Control Division violated a state personnel code by moving their work location from Albuquerque to Santa Fe. Included in the four employees’ new complaint are claims of retaliation and alleged inaction by the department when the employees reported what they said was an illegal cannabis grow operation. 

The hearing is scheduled for Dec. 1.

Now, after reviewing documents obtained through a public records request, NM Political Report has learned which company RLD and its Cannabis Control Division deemed the company to be in compliance after being accused of having too many plants.

On July 12, 2021, RLD received a tip, via email, that medical cannabis producer Budding Hope was growing “over 6,000 plants illegally.” The person who sent the email, whose name was redacted by the department, followed up twice within a week with more specifics. By July 27, Matilde Colomo, an inspector for the Cannabis Control Division and one of the plaintiffs in the lawsuit, emailed Deputy Director of Policy Robert Sachs with a recap of what he and another inspector found at Budding Hopes grow site. 

“As approved by you we will instruct the individual attending the plants to destroy them,” Colomo told Sachs in the email. 

But about 30 minutes later, Colomo sent another email to Sachs to confirm new instructions on how to handle Budding Hope’s operation. 

“Per your instructions from Superintendent Linda Trujillo, we were told to inform Budding Hope that they do not have to destroy the illegal grow that was verified today,” Colomo wrote. “Instead they are authorized to keep the illegal plants but have to ensure biotrack numbers are attached to them ASAP and must be submitted with the renewal license at the end of the week.”

Sachs, in his reply, confirmed that “all the points” in Colomo’s email were correct. 

In another follow-up email, former Deputy Superintendent of RLD John Blair wrote that the issue would be assigned to an investigator with RLD’s Securities Division, namely to comply with the state’s Uniform Licensing Act, which affords a level of due process for certain license holders. 

“Going forward, we have to ensure that our inspectors aren’t put in the position where they are inspecting allegations of wrongdoing and they’re also acting as the judge and jury onsite without any due process,” Blair wrote in a July 28 email. 

Cannabis Control Division spokesperson Heather Brewer told NM Political Report that the division followed up and found that Budding Hope was in compliance. 

“As part of the Cannabis Control Division’s ongoing effort to ensure an open, fair and transparent regulatory process, two Regulation and Licensing Department attorneys did an on-site inspection to follow-up on the investigation,” Brewer said. “Budding Hope was found to be in compliance.”

According to records obtained by NM Political Report, Gregory Stover, a special agent with RLD’s Securities Division compiled a “summary and observation” report after a July 30 meeting with three of the four plaintiffs in the suit against RLD. Stover said he found that inspectors made two visits to Budding Hope as part of the licensing process under RLD, but that a third visit occurred after the Cannabis Control Division received the complaint that Budding Hope was growing more cannabis than allowed. Stover recommended that Cannabis Control Division inspectors visit sites no more than twice and leave investigations of illegal plants to law enforcement. Further, Stover wrote that since Budding Hope was sanctioned by the New Mexico Department of Health in 2019 “for having approximately 1,300 untagged plants,” and inspectors had already conducted an unannounced third inspection, it might be best for inspectors not to visit Budding Hope for a fourth time. 

“After everything that’s happened with Budding Hope to date, I’m concerned that a fourth re-inspection visit might be viewed by the courts not only as completely unnecessary, but possibly as violating their Fourth Amendment rights and potentially harassment.” 

It’s unclear exactly what the discrepancy was between Budding Hope’s early inspections and the one conducted by department lawyers, but in Colomo’s July 27 email, he mentioned that Budding Hope had “approximately 425 plants over 12 [inches]” without a tracking number. Previous rules under the Department of Health deemed anything over 12 inches as a mature plant, whereas the new Cannabis Control Act defines a mature plant as being in the flowering stage of growth. 

Brewer, the Cannabis Control Division spokesperson, confirmed that plants not in the flowering stage do not need to be tracked. 

“The Cannabis Control Division doesn’t include immature plants in a producer’s plant count,” Brewer said. “There is no requirement for immature plants to be tracked.”

Brewer also said the division has a specific process for investigations that also complies with the Uniform Licensing Act.  

“The process includes gathering information and reviewing information to determine compliance or noncompliance,” Brewer said. “If a business is found to be noncompliant, the CCD may issue a notice of contemplated action, which could include possible action against the business’ license. A licensee can request a hearing or demonstrate they have come into compliance and the CCD may opt to enter a settlement agreement citing the issue has been resolved and the licensee will adhere to the CRA and CCD rules.”

Lawyers for the four plaintiffs and RLD in the suit filed against the department and its Cannabis Control Division, are scheduled to be in court next week to discuss whether its proper to add a Whistleblower Protection Act claim to the original suit or if it needs to be filed separately.