With legal recreational-use cannabis sales scheduled to start this Friday, questions still remain as to whether the state will see a shortage of medical cannabis, and whether those possible shortages will emerge within days, weeks or months after sales begin.
While state regulators have somewhat downplayed the possibility of cannabis shortages while also implementing emergency rules to temporarily increase production, many in the medical cannabis industry say they are sure there will be shortages. But opinions vary when it comes to how severe those shortages will be.
Duke Rodriguez, the president and CEO of Ultra Health, one of the most prolific and arguably the most publicly visible cannabis producers in the state, has long warned that production limits would lead to a cannabis shortage when adult-use sales start on Friday. For years the Medical Cannabis Program, overseen by the New Mexico Department of Health, limited producers to 450 plants. Eventually, that number was changed to 1,750 and now many producers are allowed to have up to 20,000 mature plants. But Rodriguez said the damage of long-time production restrictions has already been done but that his company is in a better position than many others.
“I don’t have time for ‘I told you so,’” Rodriguez said of likely being proven right.
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.
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.
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.
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.
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.
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.
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.
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.
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.