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.

Some raise concerns about out-of-state, reciprocal patients in the time of COVID-19

Amid the COVID-19 pandemic the New Mexico Department of Health approved rules that put into practice a state law allowing medical cannabis patients from other states to buy, possess and use medical cannabis in New Mexico. 

The law was passed in 2019 as part of a massive statutory change for medical cannabis. That law also included a separate provision that many have argued would have allowed non-residents of New Mexico to become a New Mexico medical cannabis patient. 

But in 2020 lawmakers, backed by Gov. Michelle Lujan Grisham and the DOH, passed a law that made sure that only those who were medical cannabis patients in other states already could qualify for New Mexico’s program. 

They argued that allowing people from nearby states without a medical cannabis program to enroll in the New Mexico Medical Cannabis Program could invite unwanted federal scrutiny. Through legislative debate and public testimony, legislators and public health officials argued that the reciprocity provision in the 2019 law would be adequate enough to provide medicine to non-resident, medical cannabis patients spending time in New Mexico and would provide enough legitimacy to keep the federal government from intervening. 

But even now that the law reverted to only allow New Mexico residents and those already enrolled in a medical cannabis program to buy, possess and use it in the state, there seems to be a loophole of sorts that may allow exactly what the governor and state officials warned against. In 2019, the New Mexico Legislature approved a massive overhaul to the state’s medical cannabis law. The changes included protection from being fired from a job or losing parental custody just for being a medical cannabis patient.

Another medical cannabis company joins in legal action against the state

A second medical cannabis company has filed a petition asking a state district judge to invalidate rules recently enacted by the New Mexico Department of Health. 

Pecos Valley Production, a medical cannabis company with dispensaries in the southern part of the state, filed a petition Monday in state district court calling for an annulment of regulatory rules that lawyers for the company called “arbitrary and capricious.”

The petition from Pecos Valley argues similar points as one filed last week, on behalf of cannabis producer and manufacturer Ultra Health. Both petitions are filed under the same case. Lawyers for Ultra Health, one of which is Brian Egolf, who also serves as the state’s Speaker of the House, argued that the Medical Cannabis Program and the DOH failed to show reasoning for new rules. Ultra Health’s lawyers also accused the state of copying regulations from other states that have a medical cannabis program like Oregon and Colorado. 

The petition from Pecos Valley Production also accused the state of adopting rules from other states instead of properly consulting with medical cannabis producers in New Mexico. “These industry participants are well versed in the day-to-day operations of the New Mexico medical cannabis industry and therefore are more likely to provide relevant New Mexico specific evidence than the standards cut and pasted from other states,” the second petition reads.

NM cannabis producer challenges new DOH rules

A high-profile medical cannabis producer filed a petition in a state district court last week, asking a judge to invalidate rules recently put in place by the New Mexico Department of Health. 

In the petition, lawyers for cannabis producer Ultra Health argued that many of the recently adopted rules regarding plant and product testing, product labels and facility safety standards are “arbitrary and capricious.”

Last year, the state’s Medical Cannabis Program, which is part of the DOH, started the rule change process with a series of public meetings, which carried over to early this year. The rules, which range from pesticide and chemical testing to reciprocity for already approved cannabis patients from other states, went into effect earlier this month. But Ultra Health’s petition focuses on the new standards for producers, some of which the petition says would increase the financial burdens for patients. 

“Producers, who already pay well over $100,000 per year for their license and are precluded by federal law from taking any income tax deductions, will have to pay for the increased testing burden and will pass along the costs to patients,” the petition reads. 

A DOH spokesman wouldn’t say if or when the department would respond to the request to annul the new rules. 

“The Department of Health does not comment on pending litigation,” DOH spokesman David Morgan said. 

Arguably a perennial thorn in the side of the department, Ultra Health and its CEO Duke Rodriguez have filed numerous legal actions against the state over issues like the legality of displaying a cannabis plant at the state fair and increasing the number of plants producers can grow. Brian Egolf, who also serves as the state’s speaker of the House, is one of two lawyers who filed the petition.  

Testing and labels 

The new rules from the DOH spell out specific standards for testing plants for fungus, pesticides and heavy metals. But in the petition, Ultra Health’s lawyers argued that the department failed to show evidence that the safe level of contaminants is based on studies or science.  

“While Petitioner Ultra Health agrees that some testing is necessary to protect the safety of cannabis patients, DOH’s rules do not draw the necessary connection between the arbitrarily chosen testing parameters and specific measurements of patient safety,” the petition states. 

The petition also asserts that the DOH simply copied regulations from other states like Colorado and Oregon, where both medical and recreational-use cannabis are legal.

State judge denies petition for medical cannabis use while on house arrest

A state district judge denied a petition asking the court to force Bernalillo County and its Metropolitan Detention Center to allow those on house arrest to use medical cannabis if they have a medical cannabis card.  

Second Judicial District Judge Erin O’Connell ruled from the bench during a telephone hearing on Tuesday. She said she denied the petition on the basis that it was out of her jurisdiction and that if she granted the petition it would conflict with the judges decision in a tangential criminal case. 

“The criminal court took the plea in this case and sentenced the petitioner and issued conditions of release based on that plea,” O’Connell said. “The court therefore has concern that granting relief would potentially result in conflicting orders with the criminal court. The criminal case O’Connell referred to was that of Joe Montaño. In 2019, Montaño was convicted of drunk driving and, due to a plea agreement, was sentenced to drug court and Bernalillo County’s Community Custody Program, also known as house arrest. 

Montaño previously spoke to NM Political Report about his past criminal convictions which ultimately resulted in him spending more than two decades in and out of prison. 

Montaño didn’t hide the fact from county CCP officers that he used medical cannabis and during a home visit they found cannabis and paraphernalia.

Cannabis consumption area future cloudy amid COVID-19

Amid a gradual relaxing of public health orders designed to slow the spread of COVID-19, consumers and business owners alike are navigating how to have a socially distanced meal, shopping trip and gym session. But after July, there will be a new type of business facing still unknown restrictions while at the same time allowing patrons to smoke inside. Pending a signature from the Department of Health Secretary, the state will allow medical cannabis consumption areas after July 1. But since it’s hard to predict how public health orders may change in the next 30 days, it’s also hard to say how those consumption areas will work in practice, according to Medical Cannabis Program Director Dominick Zurlo. 

“What I think is very safe to say is that, just like any other business or essential service, they will have to follow the COVID-19 guidlines that are set out in the public health orders and executive orders,” Zurlo said. Zurlo said he is not sure yet if DOH Secretary Kathyleen Kunkel will group consumption areas with restaurants in terms of restrictions, but stressed that how they operate will depend on how the number of COVID-19 cases increase or decrease. 

“If COVID 19 continues the way we are right now, then that’s going to make things a little easier.