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.

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?

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.

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.