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. 

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.

NM judge calls for increased purchase limit for medical cannabis patients

As New Mexico’s Regulation and Licensing Department works toward finalizing rules for non-medical cannabis sales, some unfinished business remains when it comes to the state’s medical cannabis program. 

A state district judge last week ordered RLD, the New Mexico Department of Health and the governor’s office to either change their policy for medical cannabis patient purchase amounts or present a compelling argument for not doing so. 

“Respondents’ purchase limitations violate equal protection principles because they will subject New Mexicans with debilitating medical conditions who are dependent on medical cannabis to lower purchase limitations than persons who purchase cannabis from the recreational (and taxed) market,” read the writ of mandamus signed by Second Judicial District Judge Benjamin Chavez. “Respondents’ unlawful rules also attempt to impose an illegal tax on any medical cannabis purchases in violation of the Cannabis Regulation Act.”

The Cannabis Regulation Act, which went into effect on June 29 and is the framework for sales expected to start next spring, allows purchasers to buy up to two ounces of cannabis at a time. But the state’s Department of Health, which is RLD’s medical cannabis counterpart, has maintained that a DOH policy limiting medical cannabis purchases to roughly eight ounces in a 90-day period takes precedence over the new law. 

For years, New Mexico cannabis patients have been limited to 230 “units” in a rolling 90-day period. DOH rules define a unit as one gram of dried cannabis “flower” or 200 milligrams of cannabis extract or concentrate. Under the new law, however, non-medical cannabis purchases are limited to two ounces for each transaction.

Growing Forward: Cannabis testing

In two weeks, the New Mexico Regulation and Licensing Department, by law, must start accepting applications for non-medical cannabis cultivation licenses. But an often overlooked aspect of the cannabis industry is testing. 

The state Department of Health has long had a list of testing requirements for medical cannabis, but now that nearly all aspects of cannabis is overseen by a new department, lab operators like Barry Dungan of Rio Grande Analytics are anxiously waiting for new testing standards. Dungan began his career in cannabis testing after a stint as a researcher at New Mexico State University. He and his partners started Rio Grande Analytics in Las Cruces, but earlier this year, the company moved to Albuquerque to be more centrally located. 

Dungan told Growing Forward, the collaborative cannabis podcast between NM Political Report and New Mexico PBS, that he’s mostly still operating under the DOH rules, but that he needs advance notification of rule changes from RLD. 

“The stuff that we need to buy are things that are in state labs and crime labs and forensic labs,” Dungan said. “This isn’t, go to the used car lot and just get one.

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.