March 30, 2022

Some Southern NM cannabis producers face conundrum with testing facility locations

Cannabis companies around the state are preparing their storefronts and bolstering their crops for the start of recreational-use cannabis sales, which will start on Friday. And while a majority of storefronts are expected to be in the Albuquerque and Santa Fe metro areas, some businesses in the southern part of the state might get held up in an important process of preparing cannabis for sales: testing. 

State law requires that the New Mexico Regulation and Licensing Department develop testing standards for commercially sold cannabis. The department’s Cannabis Control Division developed rules and regulations that require all cannabis being sold go through a series of tests that look for things like fungus, pesticides and to verify the potency level. 

But for cannabis growers in Las Cruces, it’s nearly impossible to transport cannabis products to a testing facility without the risk of federal agents seizing those products and, in some cases, any cash that is found. There are currently only two state-approved cannabis testing labs in New Mexico. One is in Albuquerque and the other is in Santa Fe. And while cannabis use and possession are both legal in New Mexico, under federal law, cannabis is still illegal. To get from Las Cruces to Albuquerque, a driver could be forced to stop at one of six U.S. Border Patrol checkpoints, depending on the route.    

Alisa Tafoya and her husband Robbie are currently operating Desert Flower Growers, a cannabis cultivation microbusiness, meaning they pay less for their license, but are also limited in the number of mature cannabis plants they can have at one time. Alisa, who has years of experience growing cannabis as a medical user, said that waiving or delaying testing standards is one possible solution, but that besides informing consumers, many growers rely on those tests to know if they are doing everything right. 

“That gives us clues to growers, like, ‘Hey, we’re doing something wrong, or we’re doing something right,’” Alisa told NM Political Report. “All that data that’s wrapped up in that is very valuable to us, aside from just stamping it onto a packaging label, as are the requirements.”

Not all of the Border Patrol checkpoints are always open, so there is always a chance cultivators like Alisa and Robbie could make the drive from Las Cruces to Albuquerque without being stopped by a federal officer. But Alisa said while she knows some cannabis producers are taking that risk, the risk is too big for the Tafoyas to consider doing that. 

“It almost forces you to jeopardize your license by trying to take it through the border checkpoint,” Alisa said. 

It’s unclear exactly how or if a federal drug charge would impact a New Mexico cannabis business license, but Landon Hutchens, a spokesperson for the Border Patrol’s El Paso sector signaled, through a statement to NM Political Report, that the agency will not bend on federal law, even in New Mexico where cannabis is legal. 

“Although legal for medical and/or recreational use in many states, marijuana is classified as a Schedule I controlled substance under federal law,” Hutchens wrote. “Therefore, U.S. Border Patrol agents will continue to take appropriate enforcement action against those who are encountered in possession of marijuana anywhere in the U.S. As for retrieval of seized cash or other property, the U.S. Border Patrol follows the procedural guidelines for seizures contained in the federal regulations.”

Alisa said she thinks there should be some way for licensed cannabis businesses to prove they are legitimate with appropriate documents.  

“I’m willing to go to the border checkpoint, give them my manifest for what I’m transporting, and then be on my way,” she said. “I’m not here to hide it.”

Even if the Tafoya’s took an alternate route than I-25, they would likely still take the chance of being forced through a checkpoint. 

“Any which way out of Las Cruces, there is a border checkpoint,” she said. “We are locked.”

A lack of labs in Las Cruces

Barry Dungan, who owns and operates Rio Grande Analytics, an Albuquerque-based cannabis testing lab, knows the stress of going through a Border Patrol checkpoint in a vehicle that smells like cannabis. While Dungan has not transported any cannabis products from Las Cruces to Albuquerque, his lab was previously based in Las Cruces up until a couple of years ago and he had to transport his equipment to Albuquerque. 

“We won’t take anything through,” Dungan said. “I was nervous even when we moved our equipment because a lot of it just kind of smelled from being in the proximity [of cannabis]. But we’ve never really run anything through that checkpoint.”

Dungan said he moved Rio Grande Analytics to Albuquerque when the only state-approved cannabis courier service abruptly stopped transporting cannabis.  

“We were driving all over New Mexico getting samples, and it was either do that and break even or move to Albuquerque where the production is and so that was the decision we made,” Dungan said. 

Since Rio Grande Analytics’ move, Dungan said, more cultivation operations have popped up along the state’s eastern border, likely in anticipation of Texas residents taking advantage of adult-use sales. 

Now, seeing the need for a southern testing facility, Dungan is working on opening a satellite lab in Las Cruces, but he said he’s at least 30 days away from submitting his paperwork to the Cannabis Control Division for approval.   

But, he said, the cost of opening a cannabis testing lab is expensive and hard to finance. Even being a part of the state’s cannabis industry has prevented him from getting a traditional mortgage for his home.  

“It’s not just my business,” Dungan said. “It’s personal in every aspect.”

Dungan estimates it will cost him about $700,000 to open his planned satellite location in Las Cruces on top of the cost of the equipment he owns in Albuquerque.

Dungan said he would like to see some sort of state-backed program that can help labs like his set up multiple locations. Last year the New Mexico Finance Authority greenlit a loan program for small cannabis businesses. 

“I definitely don’t want to take out of the pool for the new guys that are coming in, but if some of those dollars could be made available for us, that would remove the need for financing and allow us to open immediately and operate at [the state’s] guidance,” Dungan said.  

Kathleen O’Dea, who owns and operates Scepter Labs, a Santa Fe-based cannabis testing lab, told NM Political Report that she also wants to open a satellite testing facility in Las Cruces, but also cited the cost. O’Dea said she is still looking for a potential location, but that it would be cost-prohibitive to do all the required tests for a small population of the state’s cannabis businesses. For example, she said, the equipment and solutions used to test for pesticides are more expensive than other testing equipment.  

“It wouldn’t be feasible for the number of samples down there to establish a wholly separate lab,” O’Dea said. “But we could establish a satellite and do at least a portion of the test down there pretty easily.”

O’Dea said one possible solution to the testing conundrum would also require cooperation from the federal government. 

“Let’s say somebody opened a satellite down there and prepped samples and essentially rendered them unusable by humans by prepping them in solvent or something,” O’Dea said. “Will the checkpoint allow them to cross?”

There is also an expected newcomer to the niche cannabis testing market in New Mexico, though not likely in Las Cruces yet. 

A spokesperson for TriCore Labs, a New Mexico-based clinical testing lab that had a big role in COVID-19 testing, confirmed that there is a “wholly-owned subsidiary” of the company that is planning on opening a cannabis testing lab in Albuquerque.  

Beth Bailey, a spokesperson for both TriCore and the subsidiary Precision Botanicals, said the cannabis testing lab will be in a separate location and building than the clinical lab. 

“Precision Botanicals is opening in the Albuquerque area and that is the only thing we have planned at this point,” Bailey said. 

So for now, cannabis growers like the Tafoyas will have to make a decision to either risk it through the Border Patrol checkpoints or wait until there is a lab in Las Cruces. 

Alisa said she and her husband don’t have plans to open a retail location, but instead provide cannabis to other small businesses. There are some cannabis retail locations in Las Cruces, but they are mostly stocked with cannabis that was grown north of the checkpoints. And since there are no checkpoints for people traveling southbound, the risk of coming into contact with a federal officer is far less. 

Alisa does see a “small glimmer of hope” in recent events though. Last week Gov. Michelle Lujan Grisham announced two intergovernmental agreements with the Picuris and Pojoaque Pueblos that allow the sovereign governments to be a part of the state’s cannabis industry without fear of being shut down by the federal government.  

“If the federal government is willing to allow on their so-called federal lands, the growing of cannabis, then it can certainly let us through a small section of the border checkpoints,” Alisa said. 

Nora Meyers Sackett, a spokesperson for Gov. Michelle Lujan Grisham, told NM Political Report that the governor’s office has been in contact with the federal agency that oversees the Border Patrol about the importance of getting legal cannabis through those checkpoints.

“The governor’s office is in communication with the Department of Homeland Security to discuss legal state cannabis and the need to transport product for testing – those talks are ongoing,” Myers Sackett said.

Alisa said Las Cruces and the surrounding areas provide a unique opportunity for cannabis growers and likened it to green chile grown in Hatch. Cannabis, like many other plants, is photosensitive and produces the commonly smoked buds or flower after it starts receiving 12 hours or less of light or sun. Alisa said southern New Mexico provides a longer vegetative state for cannabis, which means bigger plants with likely higher yields.   

“What we have different than everybody else in New Mexico is the desert climate,” Alisa said. “We’re situated in the Chihuahuan Desert, which gives us a unique advantage of the sun.” 

But without access to a testing facility, it seems like the Tafoyas and others in their situation will be limited to selling cannabis cuttings or “clones” until they can safely get to a testing lab.   

“It’s only a small group of growers down here in Las Cruces that really can’t compete effectively with the rest of New Mexicans because we have this little border checkpoint issue,” she said. 

Adult-use sales begin on Friday for adults 21 years of age or older. Those who are of the legal age can purchase up to two ounces of cannabis at a time, with no limits on the number of transactions. But personal possession is limited to two ounces. There is no limit on cannabis stored at home, away from the public. You can hear more about cannabis in New Mexico by listening to Growing Forward, the collaborative podcast between NM Political Report and New Mexico PBS.

UPDATED: A comment from Gov. Michelle Lujan Grisham’s office was added to this story.