NM Senate leadership clears senator of ethics violation allegation

A dust-up between an outspoken New Mexico state senator and a state cabinet secretary over ethics related to cannabis legislation has come to a resolution, at least temporarily. 

According to a letter from Senate leadership last month, sent to New Mexico Department of Health Secretary Tracie Collins, there will be no legislative investigation of Sen. Jacob Candelaria, D-Albuquerque, over his professional involvement with a prominent medical cannabis business.  

In the letter, sent on May 19, Senate President Pro Tem Mimi Stewart, D-Albuquerque, wrote that she, Senate Majority Leader Peter Wirth of Santa Fe and Senate Minority Leader Greg Baca of Belen determined there was no reason for the Interim Legislative Ethics Committee to investigate the issue further. 

“I convened a meeting with Senators Wirth and Baca to review and deliberate the allegations and other information contained in your complaint and in the State Ethics Commission’s dismissal and referral,” Stewart wrote. “After our extensive evaluation, we have determined that the complaint and information did not warrant further investigation by the Interim Legislative Ethics Committee, and therefore the complaint is dismissed.”

Four days after this year’s regular session and six days before a special session, Collins filed an ethics complaint with the newly formed State Ethics Commission, alleging that Candelaria  violated the state Governmental Conduct Act by voting on a bill that would have limited medical cannabis patient reciprocity. Candelaria, who is also an attorney, represented medical cannabis producer Ultra Health months prior, challenging DOH over the same issue. 

In September 2020, the Medical Cannabis Program, which is overseen by DOH, issued a directive that medical cannabis reciprocity only applied to patients with authorization from their respective home state to use medical cannabis. The department was attempting to close what it saw as a loophole in which Texas residents reportedly received recommendations from doctors in California and then crossed state lines to buy medical cannabis in New Mexico. By October 2020, Candelaria, on behalf of Ultra Health, successfully petitioned a state judge to overrule the department’s emergency rule change.

New Mexico Supreme Court: State not required to compensate businesses for public health closures

Businesses that were ordered to close during the early months of the COVID-19 pandemic do not have a claim for government compensation, the New Mexico Supreme Court ruled.  

The unanimous opinion, written by Justice Shannon Bacon, states that public health orders from Gov. Michelle Lujan Grisham and the state Department of Health did not constitute either a physical or regulatory “taking” of property that would warrant compensation from the state. 

“Occupancy limits and closure of certain categories of businesses, while certainly harsh in their economic effects, are directly tied to the reasonable purpose of limiting the public’s exposure to the potentially life-threatening and communicable disease, and thus can be deemed ‘reasonably necessary,”’ Bacon wrote. 

Before Lujan Grisham’s office asked the high court to take the case, business owners who sought compensation after emergency public health orders forced them to close their doors to the public filed a number of suits around the state in lower courts. Lujan Grisham’s office asked the state supreme court to decide whether a public health order to close businesses constitutes a regulatory taking. 

Another question posed to the court was whether a portion of state law that specifically mentions compensation in public health emergencies applied to all types of businesses or just medical companies. The group of businesses seeking compensation argued that the state Public Health Emergency Response Act’s provision on compensation includes non-medical businesses with the words “any other property.” But the state supreme court seemed to agree with the governor’s office argument that ejusdem generis, or a Latin term meaning of the same kind, applied to the words “any other property,” essentially meaning any other medical or medically related company  taken by the state to help fight a public health emergency. 

“Because a public health emergency can affect the entire population, anyone and everyone could be a potential claimant under the Real Parties’ interpretation, even under far less restrictive measures than the [public health orders],” Bacon wrote. “It is simply not credible that the Legislature in enacting the PHERA intended for such a potential raid on the public wealth while simultaneously granting broad powers to protect the public health.” Further, the high court also ruled that anyone seeking compensation under PHERA has to first follow the law’s procedure for a claim, which means the claim has to first go through the state Attorney General’s Office.

Citizen lawmakers find work in new cannabis industry

Cannabis legalization in New Mexico was sold as, amongst other things, a job creator. Those who are eyeing the new industry are navigating proposed rules and regulations and making plans for real space, how many plants they will be able to grow and how to get their applications approved by the state. Now there seems to be a niche market for cannabis adjacent businesses, particularly those aimed at guiding business owners through the process. 

Even prior to the passage of the Cannabis Regulation Act in the New Mexico Legislature, a handful of consulting and legal firms specializing in cannabis regulations and law existed. But since the Cannabis Regulation Act passed, there are at least three elected officials who are currently, or plan to, sell their knowledge to those interested in getting in at the ground floor of what is expected to become a booming new industry. 

That raises questions about the ethics of state and local lawmakers selling their services in an industry they sometimes have a hand at creating. But some of those elected officials who operate cannabis adjacent businesses say they are keeping things ethical but that the dilemma could be avoided if lawmakers are paid an actual wage.    

On the evening of March 31, which was the last day of New Mexico’s special legislative session, the state Senate was deep in a debate over cannabis legalization.

Stansbury wins special election

New Mexico state Rep. Melanie Stansbury will soon officially become a U.S. Representative. 

Stansbury won easily on Tuesday over three other opponents on the ballot in a special election: Republican Mark Moores, Libertarian Chris Manning and independent candidate Aubrey Dunn. 

The special election was held in order to replace former congresswoman Deb Halaand after she was appointed and confirmed to the position of U..S. Secretary of the Interior earlier this year. 

With 100 percent of precincts reporting, as of 11:46 p.m. Tuesday night, Stansbury’s votes accounted for 60 percent of all votes cast, while Moores had slightly 36 percent, Manning had one percent and Dunn had three percent. 

Even though there were four candidates in the running, much of the unusually timed and expedited election cycle was largely focused on Moores and Stansbury. Both Stansbury and Moores are state legislators, Moores in the state Senate and Stansbury in the House, each serving moderate districts in Albuquerque. Two other candidates qualified as write-in candidates. At an event in Old Town Albuquerque, where Stansbury supporters gathered to watch the results, U.S. Rep. Teresa Leger Fernández rallied the crowd with chants of “¡Que viva Melanie Stansbury!”

In her victory speech, Stansbury spoke about tearing up when she saw Halaand sworn in as Secretary of Interior, signalling what Stansbury said is a movement towards progressive change.

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.

NM Tax and Revenue: Lawmakers didn’t intend for cannabis tax breaks

The issue of whether taxes on medical cannabis sales in New Mexico should have been deductible prior to this year is one step closer to being heard by the state’s supreme court. 

The state Attorney General’s office filed a brief on Monday with the New Mexico Supreme Court on behalf of the New Mexico Taxation and Revenue Department that argued state lawmakers did not intend to allow gross receipts tax deductions on medical cannabis sales until this year. 

The issue stems from a request by medical cannabis producer Sacred Garden to deduct gross receipts taxes from its sales. The department denied the claim on the basis that medical cannabis is not prescribed like other medication. In New Mexico gross receipts taxes are deductible from prescription drugs and medical cannabis is not prescribed by a doctor, but instead recommended. A New Mexico Court of Appeals panel ruled in favor of Sacred Garden last January, writing that in terms of medical cannabis, the difference between a recommendation and prescription is negligible. TRD took the case to the state supreme court where it has been pending since last year.

Secretary of State and state Libertarian Party, argue legal ballot challenge lacks merit

Despite a special congressional election well underway, with many absentee ballots already returned and early in-person votes cast, the New Mexico Supreme Court may consider a case that challenges the validity of one of the candidates whose name is on the ballot. 

In April, a state district judge dismissed a claim that Chris Manning, the Libertarian candidate for First Congressional District, should not be on the ballot. Petitioners Ginger Grider and James Clayton, who are both members of the Libertarian Party of New Mexico, argued that the Libertarian Party should not have been granted major party status in the special election and that the party went against its own rules when nominating Manning. Grider and Clayton, through their attorney Blair Dunn, asked in April for the state supreme court to overturn the lower court’s decision. Dunn argued in the petition that the Libertarian Party should not be granted major party status since no gubernatorial or presidential candidate received at least five percent of the vote in the 2020 general election. 

It’s unclear when the high court may make a determination or whether it will call for oral arguments, but the New Mexico Secretary of State’s office filed a response on Tuesday that argues the Libertarian Party of New Mexico rightfully holds major party status. In the response, General Counsel for the Secretary of State’s office Dylan Lange cited a 1996 opinion from then-New Mexico Attorney General Tom Udall that states major political parties can maintain their status if any candidate from the party gets at least 5 percent of the vote on a presidential or gubernatorial election ballot.

Medical cannabis patient asks judge to rule on purchase limits

A New Mexico medical cannabis patient is challenging state rules for medical cannabis purchase limits. 

Jason Barker, a medical cannabis patient and advocate, filed a request in Santa Fe’s First Judicial District Court earlier this month, asking a judge to compel the state’s Medical Cannabis Program and Cannabis Control Division to allow medical cannabis patients to purchase the same amount of cannabis as commercial cannabis customers will be allowed to purchase early next year. 

Barker’s lawyer, Jacob Candelaria, is also a New Mexico state senator and has represented medical cannabis patients and producers in the past. One of Candelaria’s clients in the past has been medical cannabis producer Ultra Health, which has a history of filing lawsuits against the state over medical cannabis rules and regulations. Ultra Health’s president and CEO Duke Rodriguez told NM Political Report that the company has offered financial support for Barker’s case. 

“It’s an important patients’ rights issue in which we fully agree with Mr. Barker and his attorney, so we would be shirking our responsibility not to offer support,” Rodriguez said. “I am fully expecting we will not be the only licensed producer offering support on the matter.”

Candelaria said he could not discuss the issue of payment for his services, but stressed that his client in the matter is Barker and not Ultra Health. 

In a statement Candelaria accused the state of being more concerned with tax revenue than with medical cannabis patients’ well-being. 

“State regulators are trying to unlawfully discriminate against my client, and deny all medical cannabis patients the rights afforded to them under the Cannabis Regulation Act,” Candelaria said. “The law is clear, all medical cannabis patients may purchase at least two-ounces of medical cannabis at any one time, tax free, beginning on June 29, 2021.

State agencies confirm medical cannabis purchase limits will not increase anytime soon

Two New Mexico state agencies confirmed on Wednesday in a letter that medical cannabis purchase limits will not increase, as it was previously suggested last month by a group of medical cannabis producers. 

Related: NM medical cannabis patients should not expect increased purchase limits any time soon

In an official response to the group of five medical cannabis producers, New Mexico Department of Health Secretary Tracie Collins and state Regulation and Licensing Department Superintendent Linda Trujillo wrote that until commercial cannabis sales begin next year medical cannabis patients’ purchases will be limited to roughly eight ounces of cannabis in a rolling 90-day period. The Medical Cannabis Program, which is currently overseen by DOH, limits purchases to 230 units in 90-days. The program defines a unit as one gram of dried, smokable cannabis or 0.2 grams of cannabis concentrates or derivatives. 

Even after commercial cannabis sales start, Collins and Trujillo wrote, medical cannabis purchases will be constrained, but patients could still opt to buy more cannabis through commercial sales. 

“Until such time as commercial cannabis activity is permitted by the Cannabis Control Division, qualified patients will remain limited to medical purchases made pursuant to the [Lynn and Erin Compassionate Use Act], i.e., purchases in quantities that are within the 90-day adequate supply purchase limit, as specified in Section 6(K) of the [Cannabis Regulation Act],” the two wrote. 

The section of the Cannabis Regulation Act the two department heads referred to states that medical cannabis producers “shall continue to operate under rules promulgated” by DOH until RLD issues new rules. But Collins and Trujillo also said they soon plan to announce proposed rule changes for producers that could include production limits for both medical and recreational-use cannabis. 

“That rulemaking will include revisions to existing producer plant limits, although the content of the proposed rules has not yet been determined. 

Interpretation of the law

Collins and Trujillo wrote the letter in response to a letter from medical cannabis producers Ultra Health, G&G Genetics, Budding Hope, Kure and Sacred Garden, which was sent on April 14. 

The group of producers argued that on June 29, when the Cannabis Regulation Act goes into effect, medical cannabis patients should be allowed to purchase two ounces of dried cannabis, 16 grams of extract and 0.8 grams of edible cannabis at a time, as the new law states. 

With no limit on the number of purchases in a day, a patient could purchase double the amount that is allowed under the current law in a matter of eight trips to a dispensary. So, the producers reasoned, the state should consider an increase in production limits as soon as possible.

Existing cannabis producers get an extension on licensing deadline

New Mexico medical cannabis producers that intend to continue doing business after commercial cannabis sales begin next year will not be required to renew their license this summer, according to state officials. 

The state’s Department of Health and the Regulation and Licensing Department said in a letter that current medical cannabis producers can forgo the relicensing process that normally takes place during the summer months and wait to submit a request for licensure through Regulation and Licensing. 

The grace period for current producers is part of a transition of cannabis sales oversight. Since the inception of the state’s Medical Cannabis Program almost 15 years ago, the program has been run by DOH. But after June 29 nearly all aspects of cannabis sales, both recreational and medical use, will be overseen by RLD, with the exceptions of medical cannabis patient registry and medical cannabis patient purchase limits.  

Medical Cannabis Program Director Dominick Zurlo said in a statement that the grace period is aimed at saving current producers time and energy. 

“It makes the most sense to spare the Medical Cannabis Program’s licensed non-profit producers to not have to renew their non-profit renewal paperwork when in the weeks and months ahead, they have to prepare and submit their required administrative paperwork to be licensed to sell cannabis to the general public,” Zurlo said. 

The newly established Cannabis Control Division, under RLD, is required by statute to set up an advisory board that will have a role in promulgating rules and regulations for cannabis sales no later than Sept. 1 of this year. The Cannabis Control Division must also promulgate those rules and regulations by Sept.