NM sees highest month in cannabis sales, collective $10 million in tax revenue

New Mexico has collected, or is due to collect, nearly $10 million dollars from cannabis taxes, according to the state’s Regulation and Licensing and Taxation and Revenue departments. 

According to the latest announcement from the Regulation and Licensing Department, July marked the highest sales so far with more than $40 million in combined medical-use and adult-use sales. 

According to numbers provided by Regulation and Licensing, since recreational-use sales started in April, New Mexico has seen a total of about $196 million worth of cannabis sales. About $112 million was for adult-use sales which are taxed by both gross receipts and cannabis excise taxes. The total amount of sales since April, multiplied by the 12 percent cannabis excise tax signals more than $10.5 million in tax revenue, not counting gross receipts taxes on cannabis and related accessories retails might sell. But according to numbers reported by the Taxation and Revenue Department, the state is due about $9.9 million in cannabis excise tax revenue. 

Charlie Moore, a spokesperson for the tax department, told NM Political Report that the difference in numbers is likely due to not all businesses filing taxes on time. 

“The excise tax numbers we provide are a snapshot in time – it’s how much has been reported to us as of the date we run the query,” Moore said. “Though the deadline to report is the 25th of the month, some businesses may be reporting late.” 

The difference between what the tax department has reported and the calculation based on what the Regulation and Licensing has reported is nearly $700,000. Still, accounting for just the cannabis excise tax, the state is a little less than halfway to the $22 million Taxation and Revenue Secretary Stephanie Schardin Clarke projected the state will see by the end of the fiscal year.

AG candidate Jeremy Gay’s residency qualifications challenged in court filing

With about two months left before New Mexico’s general election, a candidate for state attorney general is facing a legal challenge to his candidacy qualifications. On Wednesday, a Bernalillo County resident filed a request asking a Santa Fe state district court judge to order attorney general candidate Jeremy Gay off the ballot. 

James Collie, who served a short stint as a Bernalillo County commissioner, filed a petition with the court alleging that Gay has not lived in New Mexico long enough to qualify as a candidate. 

Collie’s attorney, Ryan Harrigan, wrote in the court filing that voting records from both Florida and New Mexico, as well as Gay’s military records, show that Gay was not a resident of of New Mexico until 2019, about two years shy of what’s required by the New Mexico Constitution to run for public office. 

“Nothing in Mr. Gay’s record suggests that prior to his move to Gallup, New Mexico in 2019, he had established any semblance of a residency in New Mexico,” Harrigan wrote. “Nor is there any evidence that he was part of the New Mexico community or had knowledge of issues affecting the State of New Mexico.”

Among the exhibits Harrigan filed were records that show Gay was registered to vote in Florida from 2008 through 2018 and military records that show Gay was stationed in California as a JAG officer from about 2015 through 2019, just before he was admitted to the New Mexico State Bar. According to Gay’s LinkedIn profile, he attended a boarding school in Pennsylvania and attended college and law school in Florida. 

But Gay’s campaign manager, Noelle Gemmer, dismissed the court filing as a baseless attack on a U.S. military veteran. 

“Jeremy and his family have called New Mexico home since 2014, and his wife was born and raised in Gallup, NM. Jeremy and his family temporarily left NM on active duty orders with the U.S Marines and returned as soon as he entered the Reserve Forces,” Gemmer wrote in a statement.

Couy Griffin removed from Otero County Commission, barred from holding any future office

A Santa Fe state district court judge ordered on Tuesday that Couy Griffin be removed from office and disqualified from holding any other public office in the future because of his role in the January 6, 2021 insurrection at the U.S. Capitol. In his ruling, First Judicial District Court Judge Francis Mathew wrote that Griffin “shall be removed from his position as an Otero County Commissioner effective immediately.” Mathew also wrote that Griffin is “constitutionally disqualified” from holding any office in the future. 

The decision is in response to a civil suit filed by a group of citizens against Griffin that argued the leader of Cowboys for Trump violated the U.S. Constitution by taking part in the effort last year to stop Congress from certifying the presidential election. Griffin, representing himself, argued during a bench trial last month that he could not be removed from office because Otero County voters elected him to office and further rejected a petition to remove him from office. But Mathew wrote that Griffin himself tried to overturn the people’s will on January 6, 2021.  

“The irony of Mr. Griffin’s argument that this court should refrain from applying the law and consider the will of the people in District Two of Otero County who retained him as a county commissioner against a recall effort as he attempts to defend his participation in an insurrection by a mob whose goal, by his own admission, was to set aside the results of a free, fair and lawful election by a majority of the people of the entire country (the will of the people) has not escaped this Court,” Mathew wrote. 

Griffin has long maintained that his presence at the U.S. Capitol on January 6, 2021 was that of moral support and was protected by his right to free speech. But Mathew wrote that Griffin’s attempts to “sanitize his actions are without merit and contrary to the evidence produced by the Plaintiffs, bearing in mind that he produced no evidence himself in his own defense.”

“[Griffin’s] protestations and his characterizations of his actions and the events of January 6, 2021 are not credible and amounted to nothing more than attempting to put lipstick on a pig.”

Mathew cited evidence and witness testimony from the plaintiffs that Griffin used inflammatory language and spent days encouraging supporters to show up at the Capitol to show that Griffin and Cowboys for Trump “played a key role” in mobilizing “efforts ahead of the January 6, 2021 attack on the United States Capitol.” Mathew went on to write that eyewitness testimony “confirms that Griffin’s attention seeking behavior energized the mob when violence had already been going on for hours.”

In now widespread footage of the January 6 insurrection, Griffin can be seen climbing a barricade that was turned on its side to gain access to a restricted area of the Capitol.

NM Supreme Court issues written opinion in stream access case

The New Mexico Supreme Court on Thursday issued a written opinion regarding public access to river and stream beds that explained the court’s reasoning for a decision from the bench earlier this year. 

In March, the supreme court issued a ruling from the bench, after a brief deliberation, that river and stream beds are just as public as the water above them. On Thursday, in an opinion written by New Mexico Supreme Court Chief Justice Michael Vigil, the court further explained its unanimous decision.     

“The question here is whether the right to recreate and fish in public water also allows the public the right to touch the privately owned beds below those waters,” Vigil wrote. “We conclude that it does.”

The high court stressed that “the public’s easement includes only such use as is reasonably necessary to the utilization of the water itself and any use of the beds and banks must be of minimal impact.”

“Walking and wading on the privately owned beds beneath public water is reasonably necessary for the enjoyment of many forms of fishing and recreation,” Vigil wrote. “Having said that, we stress that the public may neither trespass on privately owned land to access public water, nor trespass on privately owned land from public water.”

The state supreme court’s opinion also stated that not only was it unconstitutional to bar wading or fishing in streams and rivers with privately owned beds, but that it was also unconstitutional for the New Mexico State Game Commission to issue regulations barring those activities on privately owned river beds. 

The Game Commission has since repealed the rule that allowed people to petition to have sections of water that flowed through their property closed to public access. “We conclude not only that the Regulations are unconstitutional, but also that the Commission lacked the authority to promulgate the Regulations,” Vigil wrote. 

The legal battle goes back to 2015 when the New Mexico Legislature enacted a new section of existing law that prohibited access to privately owned river beds within non-navigable waters. That law change spurred a handful of environment and outdoor recreation groups to file a writ of mandamus, or a request for the court to intervene.

New study shows small number of defendants charged with second crime while awaiting trial

A new study looking at the impact of pretrial detention in New Mexico reinforces a previous legislative committee’s study and found that only a small percentage of defendants are charged with a second crime while awaiting trial. 

The study, conducted by researchers from the Santa Fe Institute and the University of New Mexico’s Institute for Social Research, found that of the more than 15,000 defendants charged with a felony between July 1, 2017 and June 30, 2021, only a small fraction were charged with a second felony. 

“It is worth noting that very few of these defendants were charged with new high-level felonies,” the researchers wrote. “A total of 15 defendants in our dataset, or one out of every thousand, were charged with a new first-degree felony. A total of 141 were charged with a new second-degree felony, 70 of which were violent—about one-half of one percent.”

The latest study comes just months after the New Mexico Legislative Finance Committee released similar findings. The legislative study was released just ahead of the 2022 legislative session where Gov. Michelle Lujan Grisham, Albuquerque Mayor Tim Keller and Bernalillo County District Attorney Raúl Torrez, who is also currently the Democratic nominee for attorney general, all pushed for laws to increase penalties and make it easier to detain defendants before trial.  

The end of the session resulted in some concessions and the governor’s office seemed to shift away from its focus on a “rebuttable presumption” and called the final outcome a win. In terms of the legal system, the idea behind rebuttable presumption is that a judge assumes certain defendants are a danger to the community unless proven otherwise by the defendant’s attorney.  

The most recent study on pretrial detention, like the previous study, says rebuttable presumptions flip the burden of proof to the defense instead of prosecutors, raising “profound constitutional questions.”  

“In essence, they predict that a defendant will commit a serious crime if they are released between arrest and trial,” the researchers wrote.

NM Supreme Court upholds dismissal of case involving COVID-19 conditions in prisons

The New Mexico Supreme Court today on Thursday issued a written opinion that upheld a lower court’s dismissal of a lawsuit aimed at the state’s correctional department over the release of inmates during the height of the COVID-19 pandemic. 

In the opinion, New Mexico Supreme Court Justice Michael Vigil wrote that a Santa Fe District Court judge was right to dismiss a lawsuit against the state that sought to release inmates as a precaution against COVID-19 outbreaks in state correctional facilities. The lower court judge dismissed the case on the grounds that the plaintiffs, who were eight inmates, the American Civil Liberties Union of New Mexico and the New Mexico Criminal Defense Lawyers Association, did not first exhaust all administrative appeal options before filing the suit. Vigil wrote that a “balance must be struck” that allows the New Mexico Corrections Department to address concerns through a grievance process but does not overburden the department. 

“We cannot say that the entire inmate population of New Mexico may be considered to have exhausted administrative remedies simply because some unnamed class member/inmate tried to file a grievance,” Vigil wrote. “Similarly, we cannot say that the nearly 6,000 inmates must each individually show they have exhausted administrative remedies. Such a requirement for all class members could unduly burden the prison’s complaint system and delay resolution of grievances.” 

The original suit asked the court to order the Corrections Department to lessen the population in state correctional facilities and to take further steps to protect inmates from COVID-19 by providing masks and testing and to better isolate inmates who became infected. 

The high court also ruled that the administrative appeal requirement in cases like this is “satisfied as to an entire plaintiff class when one or more named class members have exhausted administrative remedies for each claim raised by the class,” but the court also noted that none of the plaintiffs in the case filed an administrative appeal with the Department of Corrections.

Cannabis patients, business owners hope for commitment to update cannabis law from gubernatorial candidates

Not long after the U.S. Supreme Court’s decision that abortions are not a right covered by the U.S. Constitution, award-winning actress Bette Midler posted to Twitter a doctored picture of a New Mexico welcome sign. Added to the sign were the words, “We’ve got chile, weed and reproductive rights,” referring to the fact that state lawmakers removed a criminal penalty for abortions and that the state legalized recreational-use cannabis. Hours later, Gov. Michelle Lujan Grisham’s reelection campaign jumped on the opportunity and reposted the picture with the added words, “And we’re going to keep it that way.”

If Lujan Grisham’s Republican opponent and former television meteorologist Mark Ronchetti wins the election in November, it’s likely that he will push for a change to the state’s abortion law, but his campaign has said little about whether he would push for changes to the state’s Cannabis Regulation Act. 

Medical cannabis patients and cannabis business owners who spoke with NM Political Report about cannabis and the upcoming gubernatorial election had various views on how each candidate might impact the current law, but most agreed that there is still more work to be done when it comes to the state’s cannabis industry. 

Alyssa Pearson, the chief operating officer of the cannabis company Dr. Green Organics Co., said her business is in the final stages of opening a cannabis retail store in Mesilla Park, in Southern New Mexico. Pearson declined to discuss who she plans on voting for in the upcoming election, but said she hopes lawmakers and the governor address what she sees as needed changes to the current law.  

“At this point, all that needs to be done to kill small businesses like ours is ambivalence,” Pearson said. “I know that that’s something that my business partners and I would never want to do, is vote for somebody who could potentially jeopardize the feasibility of the social equity mission of cannabis, because that’s, for us, such a huge thing.

New projections estimate $22.7 million in cannabis tax revenue

After almost five full months of recreational-use cannabis sales in New Mexico, experts say the initial revenue projections were slightly higher than what is now expected. 

During a Legislative Finance Committee meeting on Wednesday regarding revenue projections, New Mexico Taxation and Revenue Secretary Stephanie Schardin Clarke told lawmakers that the state’s general fund is expected to see about $22.7 million in revenue by the end of the current fiscal year from the state’s cannabis excise tax with an expected 10.6 percent increase each year after that. According to the committee’s chief economist though, the current projection for Fiscal Year 23 is about $5 million less than what was projected last December. The committee’s own analysis of cannabis tax revenue also projected that cannabis business licensing fees will generate about $5 million in FY 23, which began on July 1. 

There was almost no mention of cannabis revenue from committee members, but the head of one prominent cannabis producer said the new projections are a sign of overly limited cannabis production and a too-high cannabis excise tax rate. 

Duke Rodriguez, the president and CEO of the cannabis company Ultra Health, said the current limit of 20,000 plants per cannabis cultivator is still not enough to support the demand in the state, which he said contributes to higher cannabis prices that are not competitive with the illicit market. 

“Prices need to fall, quantity needs to increase and quality has to be maintained at the same time,” Rodriguez said. “But we need a per gram price of around five, pre-tax, and we’re already above 10. So, until we get a more competitive product in the marketplace, we’re not going to see that demand appear.

Cannabis class action suit over insurance moves to federal court

A class action lawsuit challenging health insurance companies’ refusal to cover the costs of medical cannabis has been moved to federal court, for now. 

The lawsuit, filed earlier this year by a group of medical cannabis patients and one cannabis production company, originally asked a state district court judge to order New Mexico healthcare insurance companies to cover the costs of medical cannabis for members. The seven insurance providers in turn refiled the case in federal court, arguing that it is the appropriate venue because the plaintiffs’ claims are inherently tied to federal law. 

In June, six New Mexico medical cannabis patients and cannabis producer Ultra Health filed the class action suit, arguing that the recent enaction of a state law requiring insurance providers to cover the costs of behavioral health services should also include medical cannabis. In turn, last week, lawyers for the insurance companies moved the case to federal court, arguing that the federal Employee Retirement Income Security Act, which sets standards for many health insurance plans, “preempts” the plaintiffs’ claims. Lawyers for the insurance providers also justified moving the case to federal court because the lawsuit “necessarily raises disputed and substantial issues of federal law,” specifically whether the federal Controlled Substances Act allows a state to mandate coverage of a substance that is still federally illegal. The final claim justifying the move to federal court argues that the type of class action lawsuit the defendants filed should be in federal court. 

The lawsuit came just months after the enactment of a state law that prohibits cost-sharing for behavioral health services. After signing the enacting legislation, Gov. Michelle Lujan Grisham praised the bill in a press release. 

“We can make a real, meaningful difference by reducing the costs for those with insurance who seek help by eliminating the copays for behavioral health services – and I’m so proud and grateful to sign this priority measure,” Lujan Grisham said. 

The state agency tasked with regulating insurance has maintained that the department, which is one of the governor’s cabinets, does not have the authority to force insurance providers to cover cannabis. 

One of the plaintiffs is Albuquerque-based attorney and New Mexico state Sen. Jacob Candelaria.

Growing Forward: Let’s Do It Live! (In Las Cruces)

Southern New Mexico arguably has unique issues compared to the central and northern parts of the state. That rings especially true when it comes to the state’s cannabis industry which launched earlier this year after the passage of the Cannabis Regulation Act. 

Growing Forward, the collaborative podcast between New Mexico PBS and NM Political Report, recently visited Las Cruces and spoke with two lawmakers from the area and the director of the state’s Cannabis Chamber of Commerce for a special live episode. New Mexico state Sen. Carrie Hamblen, D-Las Cruces, has been a vocal proponent of both medical and non-medical-use cannabis. She said when she was growing up her brother smoked cannabis, but that she initially had a negative experience with it while she was in high school.    

“I grew up in El Paso, and I had an older brother. At the time, he was a frequent user of cannabis,” Hamblen said.