Behavioral Health

Cannabis class action suit over insurance moves to federal court

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A class action lawsuit challenging health insurance companies’ refusal to cover the costs of medical cannabis has been moved to federal court, for now. 

The lawsuit, filed earlier this year by a group of medical cannabis patients and one cannabis production company, originally asked a state district court judge to order New Mexico healthcare insurance companies to cover the costs of medical cannabis for members. The seven insurance providers in turn refiled the case in federal court, arguing that it is the appropriate venue because the plaintiffs’ claims are inherently tied to federal law. 

In June, six New Mexico medical cannabis patients and cannabis producer Ultra Health filed the class action suit, arguing that the recent enaction of a state law requiring insurance providers to cover the costs of behavioral health services should also include medical cannabis. In turn, last week, lawyers for the insurance companies moved the case to federal court, arguing that the federal Employee Retirement Income Security Act, which sets standards for many health insurance plans, “preempts” the plaintiffs’ claims. Lawyers for the insurance providers also justified moving the case to federal court because the lawsuit “necessarily raises disputed and substantial issues of federal law,” specifically whether the federal Controlled Substances Act allows a state to mandate coverage of a substance that is still federally illegal. The final claim justifying the move to federal court argues that the type of class action lawsuit the defendants filed should be in federal court. 

The lawsuit came just months after the enactment of a state law that prohibits cost-sharing for behavioral health services. After signing the enacting legislation, Gov. Michelle Lujan Grisham praised the bill in a press release. 

“We can make a real, meaningful difference by reducing the costs for those with insurance who seek help by eliminating the copays for behavioral health services – and I’m so proud and grateful to sign this priority measure,” Lujan Grisham said. 

The state agency tasked with regulating insurance has maintained that the department, which is one of the governor’s cabinets, does not have the authority to force insurance providers to cover cannabis. 

One of the plaintiffs is Albuquerque-based attorney and New Mexico state Sen. Jacob Candelaria.

New Mexico cannabis

Growing Forward: Tribal governments navigate legal cannabis

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For years, as conversations and debates in Congress and state legislatures about legalizing cannabis took place, an often overlooked piece of the puzzle was what legalization meant for tribal governments. 

In most states that have legalized recreational-use cannabis, state governments have entered into agreements with sovereign nations, allowing tribes to set up their own cannabis programs. New Mexico recently signed on to two of those kinds of agreements, which allows both the Picuris and Pojoaque pueblos to grow and sell cannabis, which will presumably deter federal officials from intervening. 

Pojoaque Governor Janelle Roybal told Growing Forward, the collaborative cannabis podcast between NM Political Report and New Mexico PBS, that she and other tribal leaders were excited to sign the intergovernmental agreement with the state because it gives Pojoaque autonomy to regulate cannabis sales and see direct financial benefits. 

“For us, it gives us the opportunity under the agreement to have all regulatory authority for any dispensaries or even grow operations within our exterior boundaries, meaning they can’t get approved for a state license unless they get approval through our cannabis commission prior to that. So it allows us to have that extra protection for our tribe and our community,” Roybal said. 

Like many other tribal governments, Pojoaque’s physical boundaries are “checkerboarded,” meaning non-tribal land is surrounded by tribal land. Roybal said Pojoaque running its own independent cannabis program also allows the Pueblo to serve surrounding communities.  

“We are checkerboarded, so our library, our wellness center, our senior center, all those are open to the community, they’re not just for our tribal members,” Roybal said. “So when we expand or grow in any of our departments, it’s helping everyone in the area. So this is for not just our Pueblo, but for the whole community.”

Pojoaque’s Lt. Gov. Rafaela Sanchez said although the Pueblo’s cannabis program is not limited to those with a medical cannabis card, the primary focus of the program is holistic. 

“We really do look at it as a form of healing and wellness, and we want to bring that message across to the community, to the people,” Sanchez said.

cannabbis shortage

Conflicting views on when or if NM is headed for a medical cannabis shortage

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Cannabis producers in New Mexico have their collective eyes on daily sales numbers to determine what sort of demand there will be moving forward a week after recreational-use sales started. 

The New Mexico Cannabis Control Division reported more than $5.2 million in combined medical and recreational-use cannabis sales and more than 87,000 transactions in the first three days. The division is expected to release more numbers Friday morning. 

In addition to the hype of first-time adult-use sales, the state’s cannabis industry will likely face a spike in sales on April 20, or 4/20, which is usually the biggest day of the year for cannabis sales. While some producers told NM Political Report that they are set for the weeks and months to come, one of the state’s largest cannabis companies predicts the state is headed for a “severe shortage” of cannabis, and soon.  

“I say we’re 20 days out on the low end, about 25 on the high end,” Ultra Health President and CEO Duke Rodriguez said. 

State law defines a cannabis shortage as a situation when supply is “substantially” less than the three month period leading up to the effective date of the Cannabis Control Act. 

But Rodriguez, who has long warned about an impending shortage and has advocated for an unlimited cannabis production limit, said the cannabis shortage he is warning about is different than the statutory definition. Rodriguez said the shortage will likely emerge as limited supplies of certain products or cannabis cultivars. He also said that those types of shortages will impact large businesses like his and trickle down to smaller businesses, who likely can’t weather reduced sales, which will ultimately impact those who rely on cannabis as medicine.