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. 

NM cannabis regulators set to accept applications for growers

New Mexico cannabis regulators are one step closer to opening the proverbial floodgates for those who plan to apply for a cannabis cultivation license. 

The state’s Regulation and Licensing Department and its Cannabis Control Division announced on Tuesday that the department finalized rules and regulations for cannabis cultivation as well as a social and economic equity plan and plans for addressing possible cannabis shortages. 

The department also announced that it would start accepting cultivation applications several days ahead of the statutory deadline of Sept. 1. 

In a statement on Tuesday, RLD Superintendent Linda Trujillo said the rules “reflect the unique needs and perspectives of New Mexico residents, businesses, entrepreneurs and communities.”

“We are ready for business,” Trujillo said. “The Cannabis Control Division is committed to supporting licensees to maximize the economic opportunities that adult-use cannabis sales offer our state.”

The new rules create four different levels of cultivation licenses, based on the number of plants that a producer plans on growing. At the highest level, producers can have up to 8,000 flowering plants, but an unlimited number of immature plants. The rules seem to create a path for exceptions to the 8,000 plant rule, but also state that no cultivator may have more than 10,000 plants. 

The finalized rules also set a goal for the Cannabis Control Division to ensure that “at least 50 percent of applicants for licensure, licenses, and cannabis industry employees” represent groups and communities that have historically been negatively impacted by previous drug laws.  

For years, medical cannabis patient advocacy groups have raised concerns about the state’s Medical Cannabis Program taking a back seat to the new adult-use program.

State orders Las Cruces store to stop ‘gifting’ cannabis

In what could end up being the first test case of illicit cannabis operations in a post-legalization New Mexico, a business “gifting” cannabis has caught the attention of state regulators. 

According to KVIA-TV, the state’s Cannabis Control Division sent a cease and desist letter to a Las Cruces business called Speak Easy after it was discovered that the business was giving away cannabis with the purchase of a sticker. 

In the letter, the Cannabis Control Division concluded that the price of said stickers matched the value of the cannabis being gifted and therefore is illegal. 

“Additional media stories have been published by other media outlets in the Las Cruces, New Mexico, area likewise recounting the ‘gifting’ of cannabis products by Speak Easy to involve a purchase being made by a customer and the quantity of the ’gift’ of cannabis products provided by Speak Easy being tied to the dollar value of the purchase made by the customer,” the letter stated. A lawyer representing Speak Easy told KVIA-TV that the business is operating within the law and that gifting cannabis is still an “unsettled area of law.” 

A spokesperson for the state’s Regulation and Licensing Department, which oversees the Cannabis Control Division, previously told NM Political Report that there are two sections in law that address giving away cannabis. 

The Cannabis Control Act, which went into effect on June 29 of this year defines trafficking as “the distribution, sale, barter or giving away of cannabis products,” but in a separate section, the law states that adults 21 years of age or older can gift cannabis to another adult as long as there is no compensation. Further complicating the issue, sanctioned sales of adult-use cannabis will not start until sometime next year, and the gifted cannabis has to be obtained through legal means. 

It’s unclear whether Speak Easy and its lawyer will challenge the cease and desist letter, but the issue might be brought to the Legislature for further clarification. 

When NM Political Report asked RLD about trafficking versus gifting, Heather Brewer, a spokesperson with the department said the issue may require tweaks to the law. 

“Our understanding is that the legislators’ intent was to allow for gifts of legally purchased cannabis to someone legally allowed to possess cannabis and to prevent the giving away of cannabis, without a license,” Brewer said. “If it turns out that this language is sufficiently vague as to create actual confusion in the enforcement of the law, it might be worth the Legislature going back and clarifying the language.” 

Duke Rodriguez, the president and CEO of the prominent medical cannabis producer Ultra Health, told NM Political Report that he visited Speak Easy earlier this week and purchased a $15 sticker. He said he was given one gram of cannabis, which he promptly threw away.

Lujan Grisham says she wants NM to have the best cannabis in the region

Hundreds of people vying to be a part of New Mexico’s newest legal industry gathered in downtown Albuquerque on Wednesday, a day after recreational-use cannabis became legal in the state. 

Dozens of vendor booths that included marketing professionals, cultivation suppliers and cannabis educators attended the first day of the two-day Cannabis Legalization Conference. 

Guest speakers at the conference included state regulators and current medical cannabis producers, but the keynote speaker was Gov. Michelle Lujan Grisham, who called a special session earlier this year with the specific intention of passing a cannabis legalization bill. She then signed the bill into law after it was passed by the Legislature. Lujan Grisham told a crowd of industry hopefuls that she wants to see a cannabis industry that rivals those in nearby states. 

“Here’s what every governor wants, me included: I want you to knock the socks off this industry and make sure just like green chile, states like Colorado, keep pointing to New Mexico and say, the best cannabis industry in the country is in New Mexico,” Lujan Grisham said. “That’s what I expect. I’ve already gotten ready to purchase the billboards in Colorado so that I can poke a little productive, competitive fun at [Colorado] Governor [Jared] Polis, who you should know is a champion, and very good colleague and friend of mine, but that’s what good governors do.”

Lujan Grisham also spoke about the special session in which cannabis legalization passed and recalled that she didn’t want lawmakers to finish until cannabis legalization passed and made it to her desk.

New Mexico’s first day of legal adult-use cannabis

Today marks the first official day of adult-use cannabis legalization in New Mexico. But legal sales for those without authorization to purchase and use medical cannabis will not begin until sometime early next year. 

The New Mexico Legislature passed the Cannabis Regulation Act earlier this year during a special session and Gov. Michelle Lujan Grisham signed it into law several days later. The new law dictates that legal sales will begin no later than April 1, 2022, but there is still more work to be done in terms of setting up the framework for the state’s newest industry. Here’s just some of what you should know about legal cannabis and what is or isn’t permitted. 

Failure is not an option

The newly established Cannabis Control Division is overseen by the state’s Regulation and Licensing Department. In preparation for its third season, Growing Forward—a collaborative podcast between NM Political Report and New Mexico PBS—spoke with Regulation and Licensing Superintendent Linda Trujillo in April about the next steps for the state.

ABQ city council rejects most of mayor’s cannabis zoning proposals

The Albuquerque City Council made zoning restrictions and allowances for recreational-use cannabis official Thursday night after a six hour meeting to approve the city’s updated Integrated Development Ordinance. 

For weeks, both those in the medical cannabis industry and those hoping to be a part of the recreational-use cannabis industry have raised their concerns about zoning proposals related to cannabis, namely those that came from Albuquerque Mayor Tim Keller’s office. But the council rejected all but one proposal from Keller’s administration. 

Most of the concern from the cannabis industry was that the city would effectively zone out new cannabis retailers, manufacturers and retailers. 

Keller’s office originally proposed barring cannabis retail stores from areas that are considered to be a Main Street Corridor, or sections of the city designed to be walkable with local businesses. Examples of Main Street Corridors in Albuquerque are Nob Hill, downtown and the Barelas neighborhood, just south of downtown. 

Keller’s proposal would have prohibited cannabis retail shops “abtutting” those areas, in addition to prohibiting them from being within 300 feet of areas zoned as residential. All but one councilor voted against the measure. Councilor Trudy Jones, who sponsored the proposal, said she ultimately decided to vote against the proposal after talking to local businesses along Central in the Nob Hill neighborhood. 

“They would welcome having cannabis within our requirements, our laws and our regulations on Central, because they are dying,” Jones said.

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.

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.

Gov. Lujan Grisham: NM can lead the way in cannabis innovation

Recreational-use cannabis sales are a year away in New Mexico, but Gov. Michelle Lujan Grisham is already considering ways for the state to lead the market in innovation. 

One idea, which she said she co-opted from her communications director, is some sort of fusion of cannabis and chile. 

“It is the kind of thing that would be iconic for a state like this,” Lujan Grisham said. “And there’s so many places where we really can lead the country and the world in incredible new ways to utilize and use cannabis.”

Growing Forward, the collaborative podcast between NM Political Report and New Mexico PBS, spoke with New Mexico Governor Michelle Lujan Grisham on Thursday about adult-use cannabis in New Mexico and some of the specifics that go along with its legalization. 

The Cannabis Regulation Act, which Lujan Grisham signed earlier this month, won’t go into effect until June 29 and sales won’t start until April 2022. But the state’s Regulation and Licensing Department, which will oversee cannabis regulation, is already putting together an advisory committee and gearing up to start the licensing process this fall. 

Lujan Grisham said her role during the implementation process will be to “keep this moving” to make sure the state hits its deadlines.   

“My job is going to be to make sure that they stay on task, on track.” Lujan Grisham said. “That if there are problems that we didn’t identify early on that are raised as a result, that I find vehicles to solve those problems.”

RLD already called for applicants for the Cannabis Regulatory Advisory Committee, which, by statute, must be established by September. One of the qualifications to be on that committee is to not be associated with an existing business in the medical cannabis industry.