gross receipts tax

Conflicting views on medical cannabis as a prescription

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Amid a pending New Mexico Supreme Court case concerning medical cannabis taxes, one state cabinet official seems to have a different view on whether medical cannabis recommendations from medical professionals are the same as traditional prescriptions, at least when it comes to COVID-19 vaccine priority. 

According to an email from January of this year, obtained by NM Political Report through a public records request, New Mexico Department of Health Secretary Tracie Collins believed that medical cannabis dispensary workers should be viewed similarly to pharmacists and that medical providers “prescribe medical cannabis” when it came to priority for COVID-19 vaccinations. 

This view differs greatly from an argument the state’s Taxation and Revenue Department has put forward in an ongoing legal case regarding gross receipts taxes and whether they should be allowed to be deducted from medical cannabis sales. 

Collins’ apparent view that medical cannabis recommendations are essentially the same as prescriptions came up in a series of emails between Gov. Michelle Lujan Grisham’s staff and Department of Health officials regarding where medical cannabis dispensary workers fall in terms of COVID-19 vaccination priority. The department’s deputy secretary Laura Parajon  replied to the email chain with Collins’ take. 

“Hi, sorry for yet another weighing in opinion. I consulted with Secretary Collins, and she also believes they are like pharmacists because providers do prescribe medical cannabis,” Parajon wrote. “I am adding her to the conversation.”

While the seemingly innocuous reply was in the context of vaccine priority, Collins’ reported opinion that medical professionals “prescribe” medical cannabis goes against the argument TRD has repeatedly put forth in a still pending legal case as a reason medical cannabis producers should not be allowed to deduct gross receipts taxes they paid to the state. DOH spokesman Jim Walton told NM Political Report that the context of the email conversation is important. 

“The question Deputy Secretary Parajon and Secretary Collins was asked was whether people who worked in a medical cannabis dispensary are considered to be within COVID-19 vaccination phase 1A,” Walton said.

Cannabis Control Division

NM medical cannabis revocation hearings blocked from the public

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Last October, the Santa Fe Fire Department responded to an explosion at a well-known medical cannabis manufacturing facility. Besides being an early medical cannabis producer and manufacturer, the company, New Mexicann, experienced a similar explosion in 2015. Both instances reportedly resulted in employee injuries, but the latest explosion also resulted in a criminal complaint against New Mexicann’s executive director and reportedly a revocation hearing with the New Mexico Department of Health. 

But while the criminal proceedings against the company’s director are open to the public, Department of Health rules require that medical cannabis license revocation hearings be closed to the public. 

According to the criminal complaint against New Mexicann’s director Carlos Gonzales, the explosion last October was caused by a cannabis extraction process that the company was not licensed for. There are a variety of cannabis extraction processes, but in many instances the process involves volatile and flammable solvents. According to court records, state fire investigators found what appeared to be ethanol alcohol near a hotplate that was set to 500 degrees.

Jacob Candelaria

Limitations on medical cannabis reciprocity heads to House floor

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While two efforts to legalize and regulate recreational-use cannabis are coming down to the wire, legislation aimed at limiting medical cannabis reciprocity appears to be on a fast track to the governor’s desk. 

SB 340, sponsored by Sen. Jerry Ortiz y Pino, D-Albuquerque, passed the House Judiciary Committee unanimously on Wednesday.  

Ortiz y Pino, joined by New Mexico Department of Health officials, argued that the integrity of the state’s Medical Cannabis Program is at risk unless the law is changed to limit who can qualify as a reciprocal medical cannabis patient. 

“Our reciprocity arrangement has been taken advantage of by people who are using the internet to secure letters, not licenses, but letters from physicians in a third state,” Ortiz y Pino said. “California is the most likely, but it could be anywhere that they have loose medical cannabis programs.”

Aryan Showers with the Department of Health served as one of Ortiz y Pino’s expert witnesses and told the committee that medical cannabis reciprocity was intended to give medical cannabis patients enrolled in a “bonafide state program” the opportunity to buy, possess and consume medical cannabis in New Mexico. Instead, Showers said, there is currently a “loophole” that allows people to “circumvent the enrollment requirements” of New Mexico’s program. 

“We didn’t foresee this loophole, but it’s causing the program significant strain,” Showers said. “And we’re actually just concerned about the potential impact this could have on those New Mexicans who truly depend on the program for their medicine.”

There was no debate among committee members and only two members made supportive comments about the bill. 

Rep. Eliseo Alcon, D-Milan, jokingly asked Ortiz y Pino where to find a $30 medical cannabis card. 

“I think there are places on the internet where you can get one very quickly,” Ortiz y Pino answered. “There’s only a five minute interview with a physician in California who has a very broad understanding of how medical cannabis can be used.”

This is the second consecutive year that Ortiz y Pino sponsored a bill to amend a law he helped pass in 2019 that made broad changes to the state’s medical cannabis statute.

coronavirus

DOH: 773 new cases of COVID-19 over weekend and 21 deaths

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The New Mexico Department of Health reported 773 new cases of COVID-19 and 21 additional deaths related to the disease this weekend. DOH reported 349 new cases of COVID-19 on Sunday after reporting 424 cases on Saturday. The department reported 13 additional deaths on Sunday and 8 additional deaths on Saturday. The number of those hospitalized for COVID-19 reached 403 on Sunday, 7 more than reported on Friday. This could include those from other states who are hospitalized in New Mexico, but would not include New Mexicans who are hospitalized in other states.

First Judicial District Court

NM judge invalidates medical cannabis rules

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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.

Jacob Candelaria

NM court rules DOH can limit medical cannabis reciprocity through rules

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A state district court judge ruled Thursday that the New Mexico Department of Health is allowed to limit who can become a reciprocal medical cannabis patient through department rules. 

First Judicial District Court Judge Matthew Wilson said that his previous order to stop the department from proceeding with an emergency rule change regarding reciprocity did not prohibit the department from adopting rules regarding reciprocity in general. 

 “The writ does not say that the requirements for reciprocal participation imposed by the emergency rule and the mandate were incompatible with the [state law] or go beyond the Department of Health’s rulemaking authority,” Wilson said during the hearing on Thursday. “The writ does not forbid the creation or promulgation of a regulation through normal rulemaking process the court did not conclude the emergency rule conflicted with the act.”

The New Mexico Legislature approved medical cannabis patient reciprocity in 2019 as part of a larger overhaul to the state’s medical cannabis program. Last summer the state’s Medical Cannabis Program, overseen by the Department of Health, finalized rules for reciprocity, allowing medical cannabis patients from other states and jurisdictions to purchase and consume their medicine in New Mexico. By September, the Medical Cannabis Program notified New Mexico Dispensaries of an emergency rule change that would require reciprocal patients to provide a matching medical cannabis authorization and identification card. The program also said reciprocal patients could not be a New Mexico resident, which meant New Mexico residents could not use a medical cannabis authorization from another state with looser restrictions.

Quick Reads

NM allows crisis standards of care, pauses elective surgeries

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Citing overwhelmed hospitals, the state Department of Health issued new amendments to the state public health orders that will allow hospitals to operate under crisis standards of care regarding credentialing processes for COVID-19 health providers and another that would delay many elective surgeries until at least January. Acting Health Secretary Billy Jimenez signed the public health orders. “New Mexico’s health care providers and delivery system will continue to provide the best possible care to all patients,” Jimenez said in a statement. “New Mexico’s health care system, and everyone working within it, will continue to work toward the best possible outcome for our state. It’s so important for all of us to step up for those dedicated health care workers, to recognize the sacrifices they are making to protect our neighbors, to understand our own actions can and will make a difference.”

The crisis standards of care allows some physicians and other health care workers to be able to treat COVID-19 patients even if this is outside their scope of practice, under limited circumstances.

coronavirus

The state reports 1,250 cases of COVID-19 Sunday and 11 deaths

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The state Department of Health announced 1,250 cases of COVID-19 Sunday and 11 additional related deaths. This brought the total number of cases to 108,088 and the total number of related deaths to 1,749. The zip code with the most additional cases Sunday was 87121 with 99. It is west of Albuquerque. The other nine zip codes with the most additional cases of the respiratory illness are:

87401 – 5287105 – 4987507 – 4487120 – 3787031 – 3488203 – 3387123 – 3287114 – 2888101 – 25

Bernalillo County had about a third of the reported cases Sunday, with 391.

coronavirus

New Mexico surpasses 100,000 cases and reports record-breaking 40 deaths from COVID-19 Wednesday

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New Mexico became the 37th state to record 100,000 cases in total for COVID-19 and the state announced a record-breaking 40 deaths Wednesday related to the illness. Gov. Michelle Lujan Grisham issued a statement in response, saying that the state is “headed for a painful winter.”

“Today alone we lost 40 New Mexicans to this virus. We cannot become numb to this tragedy. Families all across our state are grappling with unfathomable grief. Each of these New Mexicans was loved.

First Judicial District Court

DOH and Medical Cannabis Program ordered back to court over reciprocity issue

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The New Mexico Department of Health and its Medical Cannabis Program have two weeks to convince a state district court judge that the department and program should not be sanctioned for violating a court order. 

The order is the latest in a legal battle between medical cannabis producer Ultra Health and the state over who qualifies as a reciprocal medical cannabis patient. 

This summer, the Department of Health finalized rules allowing patients who are authorized to use medical cannabis in another state or jurisdiction to also buy, use and possess cannabis in New Mexico. Shortly after the rule was made final, some New Mexicans reportedly started getting certified to use medical cannabis in other states that don’t have as stringent qualifications as New Mexico. 

By September, the department and the Medical Cannabis Program issued a mandate that dispensaries only sign up would-be reciprocal patients whose identification cards match their authorization to use medical cannabis. The department and program also issued an emergency rule change, specifying that New Mexicans cannot be reciprocal patients in New Mexico. 

Ultra Health, through its attorney Jacob Candelaria, who is also a state senator, days later filed a petition asking First Judicial District Court Judge Matthew Wilson to compel the state to “stop taking actions that are beyond and contrary to their statutory authority.”

By October, Wilson ordered the state to rescind its emergency rule change and mandate barring New Mexicans from registering as a medical cannabis patient in another state and becoming reciprocal patients in the New Mexico program. 

The department and medical program immediately abided by the order and again allowed New Mexico residents to register as reciprocal patients. 

But by the end of October, the Medical Cannabis Program published a notification of a proposed rule change similar to the emergency change. Then, earlier this month, the state notified the court of its plan to appeal Wilson’s decision. Two days later, Candelaria filed a motion asking Wilson to call the state back to court and explain why they should not be sanctioned for violating the judge’s order.