NM Cannabis Control Division employees sue agency over assigned work location

As the New Mexico Regulation and Licensing Department prepares to issue licenses to cannabis businesses, court records show they are also facing a lawsuit by some of the employees tasked with daily operations. 

In July, about a month after the state’s Cannabis Regulation Act went into effect, four RLD employees filed a civil complaint against the department, alleging that the employees were forced to start working in Santa Fe instead of Albuquerque, where the lawsuit says they have worked for years. 

The four employees were among a larger group of staff that were moved from the Department of Health’s Medical Cannabis Program to the RLD’s Cannabis Control Division as part of the new law that legalized adult-use cannabis. 

According to state records, Matilde Colomo and Jude Vigil are both listed as compliance officers, Matthew Peralta is listed as an environmental science specialist and Martinik Gonzales is listed as an administrative operations manager. 

According to the complaint, the four employees are “being forced to transfer their daily work operation from Albuquerque to Santa Fe and are being forced to do so against their will.”

“All Plaintiffs have experienced mental distress and anguish over being forced to commute to Santa Fe against their wishes and against their job terms,” the complaint reads. 

A spokesperson for RLD said the Cannabis Control Division does not comment on pending litigation, but reiterated that both the department and the division are working towards setting up a cannabis industry.  

“The CCD’s mission is to stand up and support a thriving medical cannabis program and adult-use cannabis industry in New Mexico,” RLD spokesperson Heather Brewer said. “The CCD staff is working hard to provide quality customer service and timely technical assistance to maximize the economic opportunities the cannabis industry will create for businesses, communities and our state.”

All four employees, according to the complaint, had already been working in Albuquerque under DOH, but were informed in June that the Albuquerque workspace was “inadequate to house the new Cannabis Control Division,” and that it was “determined” that the new division staff would need to be in one location. 

The suit claims that in moving staff from Albuquerque, RLD violated a State Personnel Office rule regarding intra-agency transfers. 

The rule in question states that employees are allowed to be transferred “without the employee’s consent to a position in the same classification within the same geographic location, which is 35 miles from the boundaries of the community in which the employee is employed or if the established requirements state that willingness to accept a change of geographic location is a condition of employment.”

Santa Fe is about 60 miles north of Albuquerque. 

According to the complaint, the four employees objected to the move and requested to work remotely from their respective homes, but were still “forced to report to the Santa Fe Office.”

The complaint asks a state district court judge to issue an injunction or temporary restraining order to halt the move until the issue can be resolved in court. RLD has until late next week to formally respond to the complaint.

NM medical cannabis producers warn of cannabis shortage ‘crisis’

As New Mexico prepares for its new recreational-use cannabis industry, two cannabis producers are warning of an impending crisis if state regulators do not lift a moratorium on expanding existing medical cannabis production. 

After the New Mexico Regulation and Licensing Department and its Cannabis Control Division announced a halt on approval of new facilities until further rules are finalized, two legacy producers, who rarely see eye to eye on regulations, said they are both worried about supply when adult-use sales begin next year. 

Earlier this year, Nicole Bazzano, the acting deputy director of business operations for the Cannabis Control Division, sent a letter to medical cannabis producers informing them that any new production facilities would have to wait until after September. 

“The [Cannabis Regulation Act] prohibits the [Cannabis Control Division] from accepting any new applications on or after June 29, 2021, for additional premises until related rules have been finalized,” Bazzano wrote. “As such, the [Cannabis Control Division] will not be processing applications for additional premises submitted June 29, 2021 or later, until rules for the corresponding license types are finalized.”

Duke Rodriguez, who is the president and CEO of prominent cannabis company Ultra Health, said that a pause on increasing production facilities will only worsen shortages he has been warning of for years.  

“We’re going to have a crisis,” Rodriguez said. “Mathematically we cannot avoid it.”

Rodriguez has long said that New Mexico, particularly in rural areas, was already experiencing cannabis supply shortages because of rules and regulations that cap the number of plants for cultivators. 

Rodriguez said the data his company has compiled shows that New Mexico could run out of cannabis completely just several days after recreational-use sales begin. He said allowing medical cannabis producers to expand operations as a way of bolstering supply is only part of the solution and that it may be too late to completely avoid a crisis. That’s partly, he said, because the New Mexico Department of Health’s Medical Cannabis Program capped production to 450 plants per producer for years.

NM starts accepting cannabis cultivation license applications

Nearly 400 companies started the process of applying for a license to grow cannabis in the first several hours the New Mexico Regulation and Licensing Department started accepting applications. 

According to an RLD representative, of the 344 applications that were started, 226 of them were for a microbusiness license, which is a type of production license to grow no more than 200 plants. 

According to RLD, five applications were submitted as complete, but had not been verified as complete. One of those completed applications, according to RLD, was a test application submitted by an existing medical cannabis producer. Existing medical cannabis producers went through the application process earlier this summer.  

In a statement RLD Superintendent Linda Trujillo said the department is committed to setting up a program “in ways that support businesses, consumers and communities.”

“The Cannabis Control Division is committed to making the licensing process as easy as possible while upholding the law and ensuring the integrity of New Mexico’s cannabis industry,” Trujillo said. “We look forward to working with licensees to stand up an industry we can all be proud of.”

The application is currently only open for cultivation, but the department and the Cannabis Control Division has to come up with rules and regulations for manufacturers, curriers, retailers and cannabis testing by January 1, 2022. 

According to a press release from RLD, integrated businesses, or those that include multiple aspects of cannabis business, will need to apply for each part of their business separately, but any fees paid for individual licenses will be applied to the total fee that would normally be applied to an integrated license application. 

The Cannabis Control Act, which legalized non-medical cannabis use in New Mexico requires that cultivation licenses be issued no later than January 1, 2022 and that retail sales begin no later than April 1, 2022. 

More information on requirements and the application process can be found here. 

Top NM cannabis regulator on rule changes: Substantive changes require a new hearing

There are less than two months left before the New Mexico Regulation and Licensing Department is required by law to start accepting recreational-use cannabis business applications. But before the department can do that, it needs to finalize rules that outline its own standards and requirements for cannabis businesses. 

The department held a public rulemaking hearing last month where dozens of people raised concerns of large cannabis growers potentially exploiting local water rights and excess water use, particularly in areas dependent on acequias. Many of the hundreds who spoke at the hearing also asked logistical questions, all of which the hearing officer said would be answered by the department outside the hearing. 

Last week RLD announced it would conduct another public hearing for an updated set of proposed rules. In a phone interview last week, RLD Superintendent Linda Trujillo told NM Political Report that the new set of rules include changes based on previous public comments as well as new proposals. 

Limits on production limits, for example, were added to the new proposals, but the department also added a proposal for provisional licenses after many people raised concerns about a requirement that physical space is secured before applying for a cannabis business license. 

The following is a conversation between NM Political Report and Trujillo, which has been edited slightly for clarity and brevity. NM Political Report: Can you explain to readers why RLD is doing another round or rules, separate from the last batch?

State takes first steps to establish adult-use cannabis regulations

On the first day of legalized, recreational-use cannabis in New Mexico the department set to oversee the new industry held a rulemaking hearing. 

During the hearing, held by the New Mexico Regulation and Licensing Department and its Cannabis Control Division, a long list of stakeholders shared their concerns about water conservation, racial and social equity and transparency. But the public comment included nearly as many questions for the department as there were concerns. 

As New Mexico struggles with yet another drought this year, many who spoke at the meeting raised concerns about large cannabis companies adding to the state’s ongoing water problems. 

Alejandría Lyons, the environmental justice organizer with the Southwest Organizing Project said she and the organization want to see more water-use oversight to protect the generations-old family farms across the state. 

“We worry about our acequias, we worry about our farmers who have already been asked not to water, to fallow their fields,” Lyons said. “And more importantly, we are very worried about the oversight. The Office of the State Engineer is already at capacity, and we fear that we need higher regulation to prevent illegal water use, especially in a drought year, as we’re seeing right now.”

Jaimie Park, the policy coordinator and staff attorney for the New Mexico Acequia Association said that although the Cannabis Regulation Act details water requirements like showing proof of access to water or water rights, she and the association would like to see deliberate rules regarding legal access to water. 

“It’s really important that the regulatory language mirror the statutory language so that this important water protection mandate is lawfully and meaningfully implemented through these draft rules,” Park said. 

Park added that she and the association submitted written comments with suggestions that RLD and the Cannabis Control Division add stringent water reporting requirements for cannabis cultivators. 

One of the major selling points during the special legislative session that resulted in the newly effective Cannabis Regulation Act was social justice and equity. The bill’s sponsors argued that legalization should also include a minimally restrictive path for New Mexicans to enter the industry.

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.

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.

NM medical cannabis revocation hearings blocked from the public

Last October, the Santa Fe Fire Department responded to an explosion at a well-known medical cannabis manufacturing facility. Besides being an early medical cannabis producer and manufacturer, the company, New Mexicann, experienced a similar explosion in 2015. Both instances reportedly resulted in employee injuries, but the latest explosion also resulted in a criminal complaint against New Mexicann’s executive director and reportedly a revocation hearing with the New Mexico Department of Health. 

But while the criminal proceedings against the company’s director are open to the public, Department of Health rules require that medical cannabis license revocation hearings be closed to the public. 

According to the criminal complaint against New Mexicann’s director Carlos Gonzales, the explosion last October was caused by a cannabis extraction process that the company was not licensed for. There are a variety of cannabis extraction processes, but in many instances the process involves volatile and flammable solvents. According to court records, state fire investigators found what appeared to be ethanol alcohol near a hotplate that was set to 500 degrees.