NM Cannabis Control Division employees sue agency over assigned work location

As the New Mexico Regulation and Licensing Department prepares to issue licenses to cannabis businesses, court records show they are also facing a lawsuit by some of the employees tasked with daily operations. 

In July, about a month after the state’s Cannabis Regulation Act went into effect, four RLD employees filed a civil complaint against the department, alleging that the employees were forced to start working in Santa Fe instead of Albuquerque, where the lawsuit says they have worked for years. 

The four employees were among a larger group of staff that were moved from the Department of Health’s Medical Cannabis Program to the RLD’s Cannabis Control Division as part of the new law that legalized adult-use cannabis. 

According to state records, Matilde Colomo and Jude Vigil are both listed as compliance officers, Matthew Peralta is listed as an environmental science specialist and Martinik Gonzales is listed as an administrative operations manager. 

According to the complaint, the four employees are “being forced to transfer their daily work operation from Albuquerque to Santa Fe and are being forced to do so against their will.”

“All Plaintiffs have experienced mental distress and anguish over being forced to commute to Santa Fe against their wishes and against their job terms,” the complaint reads. 

A spokesperson for RLD said the Cannabis Control Division does not comment on pending litigation, but reiterated that both the department and the division are working towards setting up a cannabis industry.  

“The CCD’s mission is to stand up and support a thriving medical cannabis program and adult-use cannabis industry in New Mexico,” RLD spokesperson Heather Brewer said. “The CCD staff is working hard to provide quality customer service and timely technical assistance to maximize the economic opportunities the cannabis industry will create for businesses, communities and our state.”

All four employees, according to the complaint, had already been working in Albuquerque under DOH, but were informed in June that the Albuquerque workspace was “inadequate to house the new Cannabis Control Division,” and that it was “determined” that the new division staff would need to be in one location. 

The suit claims that in moving staff from Albuquerque, RLD violated a State Personnel Office rule regarding intra-agency transfers. 

The rule in question states that employees are allowed to be transferred “without the employee’s consent to a position in the same classification within the same geographic location, which is 35 miles from the boundaries of the community in which the employee is employed or if the established requirements state that willingness to accept a change of geographic location is a condition of employment.”

Santa Fe is about 60 miles north of Albuquerque. 

According to the complaint, the four employees objected to the move and requested to work remotely from their respective homes, but were still “forced to report to the Santa Fe Office.”

The complaint asks a state district court judge to issue an injunction or temporary restraining order to halt the move until the issue can be resolved in court. RLD has until late next week to formally respond to the complaint.

NM medical cannabis producers warn of cannabis shortage ‘crisis’

As New Mexico prepares for its new recreational-use cannabis industry, two cannabis producers are warning of an impending crisis if state regulators do not lift a moratorium on expanding existing medical cannabis production. 

After the New Mexico Regulation and Licensing Department and its Cannabis Control Division announced a halt on approval of new facilities until further rules are finalized, two legacy producers, who rarely see eye to eye on regulations, said they are both worried about supply when adult-use sales begin next year. 

Earlier this year, Nicole Bazzano, the acting deputy director of business operations for the Cannabis Control Division, sent a letter to medical cannabis producers informing them that any new production facilities would have to wait until after September. 

“The [Cannabis Regulation Act] prohibits the [Cannabis Control Division] from accepting any new applications on or after June 29, 2021, for additional premises until related rules have been finalized,” Bazzano wrote. “As such, the [Cannabis Control Division] will not be processing applications for additional premises submitted June 29, 2021 or later, until rules for the corresponding license types are finalized.”

Duke Rodriguez, who is the president and CEO of prominent cannabis company Ultra Health, said that a pause on increasing production facilities will only worsen shortages he has been warning of for years.  

“We’re going to have a crisis,” Rodriguez said. “Mathematically we cannot avoid it.”

Rodriguez has long said that New Mexico, particularly in rural areas, was already experiencing cannabis supply shortages because of rules and regulations that cap the number of plants for cultivators. 

Rodriguez said the data his company has compiled shows that New Mexico could run out of cannabis completely just several days after recreational-use sales begin. He said allowing medical cannabis producers to expand operations as a way of bolstering supply is only part of the solution and that it may be too late to completely avoid a crisis. That’s partly, he said, because the New Mexico Department of Health’s Medical Cannabis Program capped production to 450 plants per producer for years.

NM starts accepting cannabis cultivation license applications

Nearly 400 companies started the process of applying for a license to grow cannabis in the first several hours the New Mexico Regulation and Licensing Department started accepting applications. 

According to an RLD representative, of the 344 applications that were started, 226 of them were for a microbusiness license, which is a type of production license to grow no more than 200 plants. 

According to RLD, five applications were submitted as complete, but had not been verified as complete. One of those completed applications, according to RLD, was a test application submitted by an existing medical cannabis producer. Existing medical cannabis producers went through the application process earlier this summer.  

In a statement RLD Superintendent Linda Trujillo said the department is committed to setting up a program “in ways that support businesses, consumers and communities.”

“The Cannabis Control Division is committed to making the licensing process as easy as possible while upholding the law and ensuring the integrity of New Mexico’s cannabis industry,” Trujillo said. “We look forward to working with licensees to stand up an industry we can all be proud of.”

The application is currently only open for cultivation, but the department and the Cannabis Control Division has to come up with rules and regulations for manufacturers, curriers, retailers and cannabis testing by January 1, 2022. 

According to a press release from RLD, integrated businesses, or those that include multiple aspects of cannabis business, will need to apply for each part of their business separately, but any fees paid for individual licenses will be applied to the total fee that would normally be applied to an integrated license application. 

The Cannabis Control Act, which legalized non-medical cannabis use in New Mexico requires that cultivation licenses be issued no later than January 1, 2022 and that retail sales begin no later than April 1, 2022. 

More information on requirements and the application process can be found here. 

NM judge calls for increased purchase limit for medical cannabis patients

As New Mexico’s Regulation and Licensing Department works toward finalizing rules for non-medical cannabis sales, some unfinished business remains when it comes to the state’s medical cannabis program. 

A state district judge last week ordered RLD, the New Mexico Department of Health and the governor’s office to either change their policy for medical cannabis patient purchase amounts or present a compelling argument for not doing so. 

“Respondents’ purchase limitations violate equal protection principles because they will subject New Mexicans with debilitating medical conditions who are dependent on medical cannabis to lower purchase limitations than persons who purchase cannabis from the recreational (and taxed) market,” read the writ of mandamus signed by Second Judicial District Judge Benjamin Chavez. “Respondents’ unlawful rules also attempt to impose an illegal tax on any medical cannabis purchases in violation of the Cannabis Regulation Act.”

The Cannabis Regulation Act, which went into effect on June 29 and is the framework for sales expected to start next spring, allows purchasers to buy up to two ounces of cannabis at a time. But the state’s Department of Health, which is RLD’s medical cannabis counterpart, has maintained that a DOH policy limiting medical cannabis purchases to roughly eight ounces in a 90-day period takes precedence over the new law. 

For years, New Mexico cannabis patients have been limited to 230 “units” in a rolling 90-day period. DOH rules define a unit as one gram of dried cannabis “flower” or 200 milligrams of cannabis extract or concentrate. Under the new law, however, non-medical cannabis purchases are limited to two ounces for each transaction.

New Mexico’s first day of legal adult-use cannabis

Today marks the first official day of adult-use cannabis legalization in New Mexico. But legal sales for those without authorization to purchase and use medical cannabis will not begin until sometime early next year. 

The New Mexico Legislature passed the Cannabis Regulation Act earlier this year during a special session and Gov. Michelle Lujan Grisham signed it into law several days later. The new law dictates that legal sales will begin no later than April 1, 2022, but there is still more work to be done in terms of setting up the framework for the state’s newest industry. Here’s just some of what you should know about legal cannabis and what is or isn’t permitted. 

Failure is not an option

The newly established Cannabis Control Division is overseen by the state’s Regulation and Licensing Department. In preparation for its third season, Growing Forward—a collaborative podcast between NM Political Report and New Mexico PBS—spoke with Regulation and Licensing Superintendent Linda Trujillo in April about the next steps for the state.

Medical cannabis producers call for increased plant limits

Just days after New Mexico Gov. Michelle Lujan Grisham signed a recreational-use cannabis bill into law and less than 90 days before the law goes into effect, some in the existing medical cannabis industry want state officials to immediately increase the amount of cannabis they can grow. 

A group of five New Mexico medical cannabis producers sent a letter with their concerns about the rollout of recreational-use cannabis to the heads of the state’s Regulation and Licensing Department and the state’s Department of Health. The letter from the medical cannabis producers said that even after the law goes into effect, a lack of new promulgated rules could result in increased medical sales, which, the producers argued, could also mean a shortage of medical cannabis for existing patients. 

“Therefore, the undersigned producers request that DOH and RLD raise the plant limitation until the full commercial market can be phased in,” the letter reads. The group of producers calling for an increase in allowed plants include Ultra Health, which has long called for an increase in medical cannabis production limits or no limits at all, and Sacred Garden, which is currently involved in a legal battle with the state over gross receipts taxes on medical cannabis. The other three producers who signed onto the letter are G&G Genetics, Budding Hope and Kure. 

The Department of Health oversees the current Medical Cannabis Program. Regulation and Licensing will oversee all but the medical cannabis patient registry after the law goes into effect on June 29. 

In their letter, the producers reasoned that after June 29, existing Department of Health rules for purchase limits will be invalid.

Auditor report shows public agencies with deficiencies

State Auditor Tim Keller released a financial health report card of sorts for New Mexico state and local government. The attempt is to provide a financial health report card of sorts for New Mexico state and local government. Keller said in a statement that the new, annual Findings Report is meant to make the complex subject of financial audits of public agencies “more transparent to the public, legislators and oversight bodies.”

Public entities are required to conduct and release annual audits. And while the bulk of public agencies are handling their money well, Keller said a few “are not up to par and need to address weaknesses in their financial controls immediately.”

These include five state agencies that made material misstatements—or financial reports that don’t follow adequate auditing protocol—or “undetected” misstatements. Among those five agencies is the New Mexico Secretary of State, where embattled Dianna Duran is facing criminal charges for allegedly abusing her campaign money for personal purposes.