A legal battle has emerged between a New Mexico cannabis business and the agency tasked with regulating cannabis production and sales after state regulators reportedly found mold in some of the company’s products.
The day before legal adult-use cannabis sales began, cannabis producer Sacred Garden filed a request for a temporary restraining order and preliminary injunction in state court, asking a judge to effectively override a cease and desist order issued by the state’s Cannabis Control Division.
First Judicial District Court Judge Bryan Biedscheid, during a hearing on Tuesday, ordered the Cannabis Control Division to allow Sacred Garden to sell manufactured products, which both parties agreed would not have been affected by the mold that was reportedly found.
Biedscheid said on Tuesday that “the appropriate court order” he could issue at the time was to allow Sacred Garden to sell manufactured products that are “thought to be safe by virtue of the process involved.”
Biedscheid also took issue with the reason that regulators had not been back to Sacred Garden’s facility to determine if the reported mold problem had been resolved. Kevin Graham, deputy general counsel for the New Mexico Regulation and Licensing Department, which oversees the Cannabis Control Division, initially told Biedscheid that the division cannot send a qualified inspector to Sacred Garden’s facility until early next week.
“One of the reasons we said we needed until Monday in order to be able to come back out to the facility was that we have one staff member who’s particularly qualified to assist in that type of examination,” Graham told Biedscheid. “He’s out of town on vacation, which, you know, employees get to take some time off every once in a while.”
Sacred Garden’s attorney, David Foster, told Biedscheid that the facility that the division shut down is key to the company’s operation. Because state regulators froze the company’s access to the state’s tracking software and 95 percent of Sacred Garden’s supply comes from that facility, Foster said, the entire company is at risk of shutting down.
“They’re about to be out of product to sell, I would say by tomorrow at the latest,” Foster said.
Biedscheid gave the Cannabis Control Division another day to review an updated independent test from Sacred Garden and said he wanted to balance public safety with the prosperity of the cannabis business.
“We’ve got two issues here,” Biedscheid said. “One is speed to mitigate any harm to this company, in terms of a determination and an open-ended ‘Well, maybe things will work out when people come back from vacation,’ in the current environment isn’t cutting it.”
Biedscheid gave Graham until Thursday morning to respond to the latest test Sacred Garden commissioned and said he was prepared to schedule another timely hearing if needed.
“I’m not comfortable saying that I’m going to override the department, and it’s going to go to retail,” Biedscheid said.