Top NM cannabis regulator on rule changes: Substantive changes require a new hearing

There are less than two months left before the New Mexico Regulation and Licensing Department is required by law to start accepting recreational-use cannabis business applications. But before the department can do that, it needs to finalize rules that outline its own standards and requirements for cannabis businesses. 

The department held a public rulemaking hearing last month where dozens of people raised concerns of large cannabis growers potentially exploiting local water rights and excess water use, particularly in areas dependent on acequias. Many of the hundreds who spoke at the hearing also asked logistical questions, all of which the hearing officer said would be answered by the department outside the hearing. 

Last week RLD announced it would conduct another public hearing for an updated set of proposed rules. In a phone interview last week, RLD Superintendent Linda Trujillo told NM Political Report that the new set of rules include changes based on previous public comments as well as new proposals. 

Limits on production limits, for example, were added to the new proposals, but the department also added a proposal for provisional licenses after many people raised concerns about a requirement that physical space is secured before applying for a cannabis business license. 

The following is a conversation between NM Political Report and Trujillo, which has been edited slightly for clarity and brevity. NM Political Report: Can you explain to readers why RLD is doing another round or rules, separate from the last batch?

State takes first steps to establish adult-use cannabis regulations

On the first day of legalized, recreational-use cannabis in New Mexico the department set to oversee the new industry held a rulemaking hearing. 

During the hearing, held by the New Mexico Regulation and Licensing Department and its Cannabis Control Division, a long list of stakeholders shared their concerns about water conservation, racial and social equity and transparency. But the public comment included nearly as many questions for the department as there were concerns. 

As New Mexico struggles with yet another drought this year, many who spoke at the meeting raised concerns about large cannabis companies adding to the state’s ongoing water problems. 

Alejandría Lyons, the environmental justice organizer with the Southwest Organizing Project said she and the organization want to see more water-use oversight to protect the generations-old family farms across the state. 

“We worry about our acequias, we worry about our farmers who have already been asked not to water, to fallow their fields,” Lyons said. “And more importantly, we are very worried about the oversight. The Office of the State Engineer is already at capacity, and we fear that we need higher regulation to prevent illegal water use, especially in a drought year, as we’re seeing right now.”

Jaimie Park, the policy coordinator and staff attorney for the New Mexico Acequia Association said that although the Cannabis Regulation Act details water requirements like showing proof of access to water or water rights, she and the association would like to see deliberate rules regarding legal access to water. 

“It’s really important that the regulatory language mirror the statutory language so that this important water protection mandate is lawfully and meaningfully implemented through these draft rules,” Park said. 

Park added that she and the association submitted written comments with suggestions that RLD and the Cannabis Control Division add stringent water reporting requirements for cannabis cultivators. 

One of the major selling points during the special legislative session that resulted in the newly effective Cannabis Regulation Act was social justice and equity. The bill’s sponsors argued that legalization should also include a minimally restrictive path for New Mexicans to enter the industry.

Cannabis providers try to navigate a new industry

While the New Mexico Regulation and Licensing Department scrambles to fully implement regulations for non-medical cannabis, those who plan to get into the new industry as well as those already in the medical cannabis industry are already trying to navigate proposed rules. 

With an April 2022 deadline to have a fully implemented adult-use cannabis program, RLD has posted proposed rules that will be considered on June 29, the same day the recently passed Cannabis Regulation Act goes into effect. But that also means current medical cannabis producers and those industry hopefuls are combing through the proposed rules, watching local zoning proposals and hoping to get the ear of regulators and elected officials. 

Matt Muñoz and his business partners are just several of many who are watching the process closely in order to better understand proposed rules and regulations and be prepared to hit the ground running. 

Muñoz is finishing his last few weeks of work in the University of New Mexico’s Office of Government & Community Relations while he and his business partners plan for deadlines and shape their business to comply with state regulations. During legislative sessions, Muñoz serves as a lobbyist for the university and he said that work has connected him with lawmakers as well as various department staffers. But he said not everyone has the advantage of knowing who to call with questions or concerns. 

“One of the benefits of where I’ve come from with the lobbying world is, I do have those connections,” Muñoz said. “I can help our small business figure this out, but the average New Mexican isn’t going to have that same ability that I have just because I have the connections from being at the Legislature for 10 years.”

Muñoz and his partners already registered their business, Carver Family Farms, with the New Mexico Secretary of State’s office and plan to get a cannabis microbusiness license which would allow them to grow up to 200 cannabis plants.

Medical cannabis patient asks judge to rule on purchase limits

A New Mexico medical cannabis patient is challenging state rules for medical cannabis purchase limits. 

Jason Barker, a medical cannabis patient and advocate, filed a request in Santa Fe’s First Judicial District Court earlier this month, asking a judge to compel the state’s Medical Cannabis Program and Cannabis Control Division to allow medical cannabis patients to purchase the same amount of cannabis as commercial cannabis customers will be allowed to purchase early next year. 

Barker’s lawyer, Jacob Candelaria, is also a New Mexico state senator and has represented medical cannabis patients and producers in the past. One of Candelaria’s clients in the past has been medical cannabis producer Ultra Health, which has a history of filing lawsuits against the state over medical cannabis rules and regulations. Ultra Health’s president and CEO Duke Rodriguez told NM Political Report that the company has offered financial support for Barker’s case. 

“It’s an important patients’ rights issue in which we fully agree with Mr. Barker and his attorney, so we would be shirking our responsibility not to offer support,” Rodriguez said. “I am fully expecting we will not be the only licensed producer offering support on the matter.”

Candelaria said he could not discuss the issue of payment for his services, but stressed that his client in the matter is Barker and not Ultra Health. 

In a statement Candelaria accused the state of being more concerned with tax revenue than with medical cannabis patients’ well-being. 

“State regulators are trying to unlawfully discriminate against my client, and deny all medical cannabis patients the rights afforded to them under the Cannabis Regulation Act,” Candelaria said. “The law is clear, all medical cannabis patients may purchase at least two-ounces of medical cannabis at any one time, tax free, beginning on June 29, 2021.

State agencies confirm medical cannabis purchase limits will not increase anytime soon

Two New Mexico state agencies confirmed on Wednesday in a letter that medical cannabis purchase limits will not increase, as it was previously suggested last month by a group of medical cannabis producers. 

Related: NM medical cannabis patients should not expect increased purchase limits any time soon

In an official response to the group of five medical cannabis producers, New Mexico Department of Health Secretary Tracie Collins and state Regulation and Licensing Department Superintendent Linda Trujillo wrote that until commercial cannabis sales begin next year medical cannabis patients’ purchases will be limited to roughly eight ounces of cannabis in a rolling 90-day period. The Medical Cannabis Program, which is currently overseen by DOH, limits purchases to 230 units in 90-days. The program defines a unit as one gram of dried, smokable cannabis or 0.2 grams of cannabis concentrates or derivatives. 

Even after commercial cannabis sales start, Collins and Trujillo wrote, medical cannabis purchases will be constrained, but patients could still opt to buy more cannabis through commercial sales. 

“Until such time as commercial cannabis activity is permitted by the Cannabis Control Division, qualified patients will remain limited to medical purchases made pursuant to the [Lynn and Erin Compassionate Use Act], i.e., purchases in quantities that are within the 90-day adequate supply purchase limit, as specified in Section 6(K) of the [Cannabis Regulation Act],” the two wrote. 

The section of the Cannabis Regulation Act the two department heads referred to states that medical cannabis producers “shall continue to operate under rules promulgated” by DOH until RLD issues new rules. But Collins and Trujillo also said they soon plan to announce proposed rule changes for producers that could include production limits for both medical and recreational-use cannabis. 

“That rulemaking will include revisions to existing producer plant limits, although the content of the proposed rules has not yet been determined. 

Interpretation of the law

Collins and Trujillo wrote the letter in response to a letter from medical cannabis producers Ultra Health, G&G Genetics, Budding Hope, Kure and Sacred Garden, which was sent on April 14. 

The group of producers argued that on June 29, when the Cannabis Regulation Act goes into effect, medical cannabis patients should be allowed to purchase two ounces of dried cannabis, 16 grams of extract and 0.8 grams of edible cannabis at a time, as the new law states. 

With no limit on the number of purchases in a day, a patient could purchase double the amount that is allowed under the current law in a matter of eight trips to a dispensary. So, the producers reasoned, the state should consider an increase in production limits as soon as possible.

NM medical cannabis patients should not expect increased purchase limits any time soon

The head of the department tasked with regulating recreational-use cannabis in New Mexico said medical cannabis patients should not expect purchase limits to be expanded, despite a letter from a group of New Mexico medical cannabis producers suggesting otherwise.  

Last week, during an interview for the collaborative podcast Growing Forward, New Mexico Regulation and Licensing Department Superintendent Linda Trujillo said until commercial cannabis sales begin next April, medical cannabis patients will still be limited to 230 units in a rolling 90-day period. The Medical Cannabis Program, overseen by the state’s Department of Health, defines a unit as one gram of smokable cannabis, or 0.2 grams of THC in extracts, derivatives or edible cannabis products. Representatives of both DOH and RLD confirmed that both agencies agree that medical cannabis purchase limits will continue to be determined by DOH. The Cannabis Regulation Act also seems to confirm that even after commercial cannabis sales start next year, medical cannabis purchase limits will be determined by the DOH. 

Earlier this month a group of five medical cannabis producers sent a letter to RLD and DOH, essentially arguing for an increase in production limits. The Cannabis Regulation Act, which goes into effect on June 29, will limit recreational-use cannabis purchases to two ounces at a time, but will not limit the number of purchases that can be made.

Bill to license massage therapy businesses aimed to stop ‘nefarious’ activities

A bill that looks innocuous – requiring massage parlor establishments to be licensed – could have big consequences. Although no one knows how many massage parlors are legitimate and how many are not, the ones that are not often serve as fronts for human trafficking, say authorities and sexual assault advocates. The New Mexico Regulation and Licensing Department estimates there are about 8,200 massage therapists in the state and there could be as many as 1,500 establishments that would need to apply for licensure if the bill passes. Rep. Linda Trujillo, D-Santa Fe, is sponsoring HB 155. “We recognize there are thousands of fabulous massage therapists all over the state, but there are a few that are not in the business for massage therapy,” Trujillo told NM Political Report.

Complaint: Watchdog P.I. committed fraud, used intimidation

A self-proclaimed government watchdog could have his private investigator’s license revoked, depending on what a governing board could decide next month. Another private investigator filed an official complaint with the New Mexico Regulation and Licensing Department (RLD) last month against Carlos McMahon that alleged he obtained his private investigator license fraudulently and abused his position as an investigator. McMahon has been in and out of the news since he filed a whistleblower lawsuit against the Bernalillo County Metropolitan Detention Center, his former place of employment, in 2010. At that time his name was Carlos Villanueva. He changed his last name to McMahon this June.

NM Auditor: Conflict of interest found in Corrections Dept. audit

A former deputy cabinet secretary at the New Mexico Corrections Department was put in charge of the financial relationship between the department and a television production company for which she had worked only months before, according to a new report from the state Auditor’s Office. It appears that Alex Sanchez waived at least $20,000 in fees owed by Lucky 8 TV, LLC, to the Corrections Department in June 2016 after having left  the company’s employ just three months earlier, the report shows. The state Auditor’s evidence for that claim is an email Sanchez sent employees of the company in which she noted the waived fees for the filming of Lucky 8’s prison reality series, “Behind Bars: Rookie Year.”

The Corrections Department could not provide any evidence or documentation that anyone other than Sanchez determined the amounts to be billed to the production company. This piece originally appeared at New Mexico In Depth and is reprinted here with permission. Additionally, Lucky 8 was allowed to begin filming a third season of its show last year even though the company still owed the state $42,000 from the previous two seasons, the audit found.