One cannabis legalization effort moves forward, another fails in committee

A New Mexico House of Representatives committee on Monday approved one proposal to legalize recreational-use cannabis and tabled another. 

The House Health and Human Services Committee voted mostly along party lines to pass HB 12 on to its next committee. Rep. Phelps Anderson of Roswell voted, along with Republican committee members, against HB 12. He recently changed his political affiliation from Republican to independent. 

Both HB 12, sponsored by Democratic Reps. Javier Martínez of Albuquerque and Andrea Romero of Santa Fe, and HB 17, sponsored by Democratic Reps. Tara Lujan of Santa Fe and Roger Montoya of Velarde, had largely similar aims. But Martínez and Romero’s bill would allow for home cultivation, unlimited plant counts for producers and no limits on how much cannabis a person can possess in their home. 

The committee also voted 7-4 to table HB 17, essentially stalling the bill indefinitely. 

Committee Chair Deborah Armstrong, D-Albuquerque, who is also a sponsor of HB 12, praised the efforts of all of the sponsors, but said that she wanted to streamline the effort to legalize cannabis. 

“I do think it was a responsibility of this committee to try and narrow this down and not do the same thing all over again in the next committee,” Armstrong said. 

Rep. Gail Armstrong, R-Magdalena, who voted against HB 12 and also voted against tabling HB 17, said she disagreed with the notion of paring down cannabis legalization proposals and that lawmakers should be able to consider all legislation. 

“I will say there is no reason to streamline because this is what we’re supposed to do,” Gail Armstrong said.

NM cannabis producer sues state, claims retaliation

A prominent New Mexico medical cannabis producer filed a lawsuit Wednesday against the state Department of Health, alleging the department violated a previous court order and discriminated against the company regarding cannabis plant limits.  

Albuquerque-based attorney Jacob Candelaria, who is also a New Mexico state senator, filed the motion on behalf of Ultra Health, a medical cannabis company that has previously taken the state to court numerous times. In the motion, which effectively reopened a previous lawsuit against the state, Candelaria argued that the Department of Health, which oversees the state’s Medical Cannabis Program, failed to obey a court order that plant limits for medical cannabis producers be based on reliable data and that the department discriminated against Ultra Health specifically. 

The case that was reopened was originally filed in 2016 and argued that the state’s then-limit of 450 plants was not enough to provide an adequate supply of medical cannabis to the more than 26,000 medical cannabis patients at the time. In November 2018 a state district judge ordered the state’s Department of Health to come up with a data-based plant limit for medical cannabis producers by March 2019. 

With five days until the state’s deadline, then Secretary of Health Kathyleen Kunkel sent an email to Jane Wishner, a policy advisor for Gov. Michelle Lujan Grisham, about the department’s next steps in coming up with a data-driven limit on cannabis plants. The email chain began with the former director of the Medical Cannabis Program explaining that New Mexico seemed to be the only state with a medical cannabis program that used plant counts as a limit, opposed to facility size. Wishner, in reply, contemplated taking a look at the state’s medical cannabis law and coming up with a temporary plant limit for producers.

NM judge rules medical cannabis use allowed while on house arrest

A New Mexico state district judge ruled this week that detainees in Bernalillo County’s house arrest program are allowed to use medical cannabis while serving out their sentence.  

In her ruling, Second Judicial District Judge Lucy Solimon wrote that Bernalillo County’s Community Custody Program (CCP) is, in effect, the same as parole. New Mexico’s Lynn and Erin Compassionate Use Act, as of 2019, allows medical cannabis patients who are on parole or probation to continue their use of medical cannabis. 

“Although CCP is not specifically mentioned in the Compassionate Use Act, [Bernalillo] County fails to demonstrate that CCP should be treated differently than probation or parole,” Solomon wrote. “Therefore, it appears as though the Compassionate Use Act does apply to defendants on CCP as it does to defendants on probation or parole. The issue of whether medical cannabis patients on house arrest can use medical cannabis goes back to 2019 when Albuquerque resident Joe Montaño was sentenced to the Community Custody Program after his seventh drunk driving conviction. Montaño, who was already a registered medical cannabis patient, previously told NM Political Report that he didn’t hide his cannabis use from his case worker during a home visit.

NM court rules DOH can limit medical cannabis reciprocity through rules

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.

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

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.

NM DOH tries again to limit medical cannabis reciprocity

The New Mexico Department of Health is trying, with two different approaches, to restrict rules on medical cannabis reciprocity. 

The Department of Health’s Medical Cannabis Program posted on their website a notice of a rule change hearing, scheduled for early next month. The new rules would only authorize out-of-state residents to become reciprocal medical cannabis patients in New Mexico. That means, under the proposed rules, New Mexico residents could not get authorization to use medical cannabis from another state and then use their out-of-state authorization to purchase, possess and use medical cannabis in New Mexico. The department’s first attempt at changing the rules, through an emergency rule change in October, was thwarted by legal action filed by New Mexico medical cannabis company Ultra Health. Represented by Albuquerque-based attorney Jacob Candelaria, who is also a New Mexico state senator, Ultra Health argued that the emergency rule changes DOH was attempting to put in place went beyond the department’s authority. 

A state district court judge ruled in favor of Ultra Health and ordered DOH to continue accepting reciprocal patients regardless of whether their identification card and medical cannabis authorization came from the same jurisdiction. 

Last week, DOH filed a notice of the department’s intent to appeal the court’s decision.

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.