NM judge invalidates medical cannabis rules

A New Mexico state district court judge ruled on Thursday that rules adopted by the state’s Medical Cannabis Program last year are effectively invalid. 

In his ruling, First Judicial District Court Judge Bryan Biedscheid repeatedly wrote that rule amendments promulgated by the Medical Cannabis Program last year lacked “substantial evidence” to support claims made by the program and the New Mexico Department of Health, which oversees the program. 

Biedscheid also wrote that the rule changes are invalid because the department and the program failed to consult with the state’s Medical Cannabis Advisory Board before making the changes. 

The suit was originally filed by a group of medical cannabis companies and one patient who is qualified to grow his own medical cannabis. The group did not initially seek to overturn the entire list of rule changes, but Biedscheid overturned the rule changes in their entirety. 

“The Court hopes that its additional findings and conclusions provide some guidance to the Department on remand and avoid additional remands due to lack of substantial evidence,” Biedscheid wrote. 

Some of the changes the group of petitioners sought to overturn included increased plant testing standards for things like heavy metals and pesticides as well as a requirement for cannabis producers to amend their license when physical changes are made to their facilities. 

The group of petitioners claimed some of the rules were “arbitrary and capricious” and that increased testing standards, without sound science to back them up, would ultimately increase prices and negatively impact cannabis patients. 

While Biedscheid ruled that the department did not follow the proper procedure, he did not comment on the merits or deficiencies of the rule changes. 

Prior to the rule changes last year, the Medical Cannabis Program and DOH already had testing standards in place, so Thursday’s ruling does not eliminate testing and labeling requirements completely. 

But, last year’s changes also included an allowance for a temporary supplemental plant increase for producers, under certain circumstances as well as rules for consumption areas. In 2019, the New Mexico Legislature passed a bill that allows for medical cannabis consumption areas, but left much of the specifics to department rules. So far, no medical cannabis producer in the state has opened a consumption area. Those rules were promulgated along with the increased testing standards and labeling requirements. 

It is unclear whether the department will appeal the court’s ruling or start the rulemaking process over again. 

A DOH spokesman said the department is “aware of the ruling” and is “evaluating options.”

The ruling came during the second week of the state’s legislative session, a busy time for state officials and at a time when many lawmakers are hoping to see recreational-use cannabis legalized.

Multiple cannabis legalization bills expected during the NM Legislative session

New Mexico’s 2021 legislative session will surely be marked with debates over education issues, state finances and abortion rights. But the Legislature is also set to weigh the pros and cons of recreational-use cannabis. In recent years,  generally speaking, Democrats have pushed for legalization while Republicans have opposed it. This year, though, Democratic lawmakers expect to see multiple legalization bills, with some technical differences. 

Senate leadership, along with at least two expected sponsors of legalization proposals, told NM Political Report that the goal this year is collaboration and to avoid bogging down the process. 

In the House, all eyes are on Rep. Javier Martínez, D-Albuquerque. 

Martínez has sponsored a bill aimed at legalization nearly every year he’s been in office. His 2019 attempt arguably saw the most progress.

NM cannabis producer sues state, claims retaliation

A prominent New Mexico medical cannabis producer filed a lawsuit Wednesday against the state Department of Health, alleging the department violated a previous court order and discriminated against the company regarding cannabis plant limits.  

Albuquerque-based attorney Jacob Candelaria, who is also a New Mexico state senator, filed the motion on behalf of Ultra Health, a medical cannabis company that has previously taken the state to court numerous times. In the motion, which effectively reopened a previous lawsuit against the state, Candelaria argued that the Department of Health, which oversees the state’s Medical Cannabis Program, failed to obey a court order that plant limits for medical cannabis producers be based on reliable data and that the department discriminated against Ultra Health specifically. 

The case that was reopened was originally filed in 2016 and argued that the state’s then-limit of 450 plants was not enough to provide an adequate supply of medical cannabis to the more than 26,000 medical cannabis patients at the time. In November 2018 a state district judge ordered the state’s Department of Health to come up with a data-based plant limit for medical cannabis producers by March 2019. 

With five days until the state’s deadline, then Secretary of Health Kathyleen Kunkel sent an email to Jane Wishner, a policy advisor for Gov. Michelle Lujan Grisham, about the department’s next steps in coming up with a data-driven limit on cannabis plants. The email chain began with the former director of the Medical Cannabis Program explaining that New Mexico seemed to be the only state with a medical cannabis program that used plant counts as a limit, opposed to facility size. Wishner, in reply, contemplated taking a look at the state’s medical cannabis law and coming up with a temporary plant limit for producers.

NM judge rules medical cannabis use allowed while on house arrest

A New Mexico state district judge ruled this week that detainees in Bernalillo County’s house arrest program are allowed to use medical cannabis while serving out their sentence.  

In her ruling, Second Judicial District Judge Lucy Solimon wrote that Bernalillo County’s Community Custody Program (CCP) is, in effect, the same as parole. New Mexico’s Lynn and Erin Compassionate Use Act, as of 2019, allows medical cannabis patients who are on parole or probation to continue their use of medical cannabis. 

“Although CCP is not specifically mentioned in the Compassionate Use Act, [Bernalillo] County fails to demonstrate that CCP should be treated differently than probation or parole,” Solomon wrote. “Therefore, it appears as though the Compassionate Use Act does apply to defendants on CCP as it does to defendants on probation or parole. The issue of whether medical cannabis patients on house arrest can use medical cannabis goes back to 2019 when Albuquerque resident Joe Montaño was sentenced to the Community Custody Program after his seventh drunk driving conviction. Montaño, who was already a registered medical cannabis patient, previously told NM Political Report that he didn’t hide his cannabis use from his case worker during a home visit.

NM cannabis industry group gives priorities for a legalization bill

It is likely that the general public will not see drafts of recreational-use cannabis legalization proposals from the legislature until next month, but one group is already suggesting language and looking for a legislative sponsor. 

The New Mexico Cannabis Chamber of Commerce publicly released an early of a recreational-use cannabis bill that they say highlights what those in the industry see as important issues. The chamber is made up of more than 40 cannabis organizations, ranging from educational and legal groups to actual cultivators and dispensaries. 

The chamber’s director, Ben Lewinger, said the group worked tirelessly to come up with language that puts the state first. 

“Our members have an agreement that what’s best for their individual companies right now is not necessarily what’s going to be best for the future of cannabis in New Mexico,” Lewinger said. 

The chamber’s early draft includes portions that were included in previous legislation, but also adds to them. 

One issue that has been publicly discussed, but not included in previous attempts is how to ensure cannabis businesses are mostly local. 

The chamber’s proposed solution is to only allow businesses with at least 60 percent of the company owned by those who have lived in the state for two years. Lewinger said the chamber wanted to ensure New Mexicans have a stake in cannabis sales, but also not hinder the flow of capital from outside the state. 

“We were trying to strike a balance between it being a true homegrown New Mexico industry, but not limiting the ability for out-of-state money to come into a New Mexico run company,” he said. 

Oklahoma, which only has a medical cannabis program, albeit one of the most prosperous in the country, has a provision that requires 25 percent of ownership is locally based. But Oklahoma is also facing a legal challenge in federal court over that requirement. Lewinger said given the pending Oklahoma case, he wouldn’t be surprised if New Mexico faces a similar challenge, if the bill moves forward as written.

Growing Forward: Testing and regulations

An ongoing debate in the medical cannabis community is over how much New Mexico’s Medical Cannabis Program should be regulated and to what testing standards the state should hold producers. 

This week in Growing Forward, we take a look at the state’s regulations and testing standards. 

The state’s Medical Cannabis Program is solely overseen by the New Mexico Department of Health. Dominick Zurlo, the director of the state’s Medical Cannabis Program, said some other states’ medical cannabis programs are overseen by multiple different agencies. 

“New Mexico is fairly unique in this way that we have an overarching Department of Health that covers the entire state,” Zurlo said. 

Earlier this year, DOH held multiple hearings about a change to testing standards. Many in the medical cannabis industry spoke out against the new proposed standards, arguing that the increased costs associated with testing would be passed along to patients. 

Duke Rodriguez, the president and CEO of cannabis producer Ultra Health, has long argued against standards that he calls arbitrary. Rodriguez told Growing Forward that his company is in favor of high testing standards, but warned that the same standards designed to protect patients can hurt their pocketbooks.  

“We want safe, reliable medicine,” Rodriguez said. “We want it to be protected, we want to be clean, but we also have to do it in a responsible way.”

Ultra Health and a handful of other producers also filed legal action against the state, arguing that the new updated rules are “arbitrary and capricious.”

We also spoke with Ginger Grider and her husband Heath.

Growing Forward: Education

In this week’s episode of Growing Forward, the collaborative podcast between NM Political Report and New Mexico PBS, we take a look at education. 

Dispensary employees must reach a certain level of required certification, but what kind of knowledge should patients expect from those who are dispensing their medication? Shanon Jaramillo runs a local cannabis education and staffing agency. She said her goal is to make sure New Mexico implements a new and rigorous education program in order to make sure dispensary employees are giving the best advice to new patients who may have never used cannabis before. Her concern is that the state legalizes recreational-use cannabis without also implementing a rigorous education requirement for medical cannabis dispensary employees.   

“I’m fearful without that educational bridge, I’m fearful that the program will take on the likeness of other medical programs that we’ve seen in other states and that will start to dwindle,” Jaramillo said. 

Part of education for both patients and non-patients  is to make it clear what medical cannabis is designed to do. An often misunderstood issue with medical cannabis is that state law does not recognize it as a substance that can cure diseases or other medical conditions.

Growing Forward: Pulling back the leaves

The fifth episode of Growing Forward, the collaborative cannabis podcast between New Mexico PBS and NM Political Report, was released on Tuesday. 

In the episode, we take a look at the cannabis plant itself and hear about how complex it really is. 

Wylie Atherton with New Mexico cannabis producer Seven Point Farms, told Growing Forward that growing experts like him have devoted much of their time to really understanding the intricacies of cannabis. 

“Discerning cannabis is an art form that’s been relegated to small cloistered groups of people who really, really loved the plant,” Atherton said. 

To the novice cannabis user, terms like sativa and indica may not mean much. Others may know the two terms as a way to tell if a cannabis strain is uplifting or relaxing. But Atherton said flavor or aroma profiles play a significant part in how a strain may affect the user. 

Terpenes are compounds found in many plants that produce aromas and flavors. Atherton used driving a car as an analogy for how terpenes and cannabinoids work together. He said the terpenes are like the driver of the car and the cannabinoids are the horsepower or engine of the car. 

“Say you’re smoking a cannabis extract like a distillate that has upwards of 80 percent THC, but there’s no terpene present.

Growing Forward and looking to the past

It is nearly a guarantee that recreational cannabis legalization will be one of the main talking points and likely a wedge issue during next year’s legislative session. Gov. Michelle Lujan Grisham has made it clear since she ran for governor and throughout her nearly two years in office that she wants to see cannabis legalized. 

There have been repeated efforts to fully legalize recreational-use cannabis for a number of years, but under former Gov. Susana Martinez those attempts repeatedly failed. Now, with a governor advocating for legalization, backed with potentially millions of dollars, there may be a light at the end of the tunnel for proponents of legalization. 

But both the 2019 and 2020 legislative sessions showed that it takes more than the governor’s support to legalize cannabis. For the past five years, even under the Martinez administration, no such effort to legalize cannabis even came close to getting to the governor’s desk. Now, even months before legislation can be filed, lawmakers are already discussing the merits and downsides of legalization.

Tax expert says there could be significant revenues in cannabis legalization, some lawmakers still skeptical

Comments and questions raised on Tuesday during an interim legislative tax policy committee point towards lengthy debates on recreational cannabis legalization in the upcoming legislative session in January. 

Richard Anklam, the president and executive director of the New Mexico Tax Research Institute, told lawmakers that states that were early in legalizing recreational-use cannabis like Colorado, Washington, Oregon and California have seen significant tax revenue increases in the past several years. Anklam, using a study from the Tax Foundation, a national think tank, said New Mexico could see roughly $70 million in excise taxes, before factoring in gross receipts taxes, if the state legalizes cannabis for recreational use. 

While not as common, Anklam said some states who have recently legalized recreational-use cannabis have developed tax models based on potency instead of by volume of what is sold. He said, the potential increase in tax revenue may not become the state’s saving grace, but that it would make a significant impact. 

“What’s the marijuana market worth? It’s worth a lot,” Anklam said. “Most states can’t fund highly significant portions of their government with it, but every little bit helps.”

Duke Rodriguez, the president and CEO of Ultra Health, a New Mexico medical cannabis production company, told lawmakers that despite the large amounts of possible tax money going to the state, current restrictions on cannabis production would not be conducive to a cannabis boom. 

Rodriguez has long been a vocal critic of the state’s Department of Health’s restrictions on how many plants producers can grow.