New Mexico Cannabis Sales Hit $40 Million in July

State officials in New Mexico announced this week that sales of regulated cannabis topped $40 million in July, setting a new record since legal sales of recreational pot began in the state earlier this year. The Cannabis Control Division of the Regulation and Licensing Department noted the figure tops the monthly purchases of regulated cannabis recorded every month since April, when licensed sales of recreational weed kicked off in the state.

During the month of July, licensed retailers throughout New Mexico reported more than $40 million in cannabis sales, with sales of adult-use cannabis alone topping $23 million. Cannabis sales totaled more than $39 million in April, the first month of legalized recreational sales and the state’s previous record high, with April adult-use sales totaling just over $22 million. New Mexico Governor Michelle Lujan Grisham said that the figures show that a strong market for regulated recreational marijuana is being created in the state.

“These numbers show that the impressive sales generated in the first month of legalized recreational cannabis sales were no fluke – and this is only the beginning,” Lujan Grisham said on Thursday in a statement from the governor’s office. “We’ve established a new industry that is already generating millions of dollars in local and state revenue and will continue to generate millions more in economic activity across the state, creating thousands of jobs for New Mexicans in communities both small and large.”

State officials noted that the strongest sales of cannabis were reported in New Mexico’s most populated areas including Albuquerque, Santa Fe, Las Cruces, Hobbs, and Rio Rancho. Albuquerque saw the highest cannabis sales in the state, with combined adult-use cannabis and medical marijuana purchases topping $14 million in July. Santa Fe was next in line, with just under $3.5 million in combined sales last month. Sunland and Hobbs, two cities on the border with Texas, where recreational pot is still illegal, each recorded more than $1 million in adult-use cannabis sales.

New Cannabis Products Helping To Drive Sales

Rusty Poe, the manager of Sol Cannabis in Las Cruces, told local media that sales at his shop keep increasing.

“Sales have actually been steadily increasing for us, the more product we bring in the more sales we have,” said Poe, noting that new products on the dispensary menu including cannabis-infused beverages and edibles have helped fuel the uptick in sales.

New Mexico Cannabis Chamber of Commerce Executive Director Ben Lewinger said that the state’s cannabis sales figures are a victory for New Mexico and its growing industry.

“I couldn’t be prouder of my home state,” said Lewinger. “The Cannabis Regulation Act presented what felt like an impossible timeline to stand up a brand new adult use cannabis industry, yet here (we) are – four months into legal cannabis for folks over 21 and we have record sales, for not only adult use but also our cherished medical cannabis program. …Best of all, no one city or county owns this success — the industry will continue to grow across the entire state.”

Since regulated sales of adult-use cannabis began in April, dispensaries have rung up more than $88 million in recreational pot sales. The Cannabis Control Division releases sales numbers monthly, with data made available at the beginning of each month for the previous month.

New Mexico’s rising sales of adult-use cannabis are a boon for the public coffers as well as the state’s cannabis industry. New Mexico Taxation and Revenue Department spokesman Charlie Moore said cannabis excise tax returns totaled close to $2.5 million in June. The amount of tax generated by sales of cannabis in July will be released by the agency in late August.

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Cannabis’ Big Impact on Border Towns

Since its founding in 1862, the town of Trinidad, CO has regularly cycled through identities, and economic raisons d’etre. The discovery of rich coal deposits in the rugged mountains along the Santa Fe trail between Denver and New Mexico meant the frontier village started as a mining town (and the way mining conglomerates worked meant Trinidad was also a company town). After the mines slowed and closed, between the 1960s and 2010, a single surgeon’s successful (and controversial) practice earned Trinidad the unofficial title of “sex-change capital of the US.” In the cannabis legalization era, another boom-and-bust cycle has come and gone in Trinidad: a cannabis “border town” that is no longer.

Boom…

Home to about 8300 people, Trinidad saw dozens of cannabis shops open for business after adult-use cannabis sales began in Colorado in 2014. Along with businesses on the town’s main street, an entrepreneur from Denver sold local authorities on permitting the world’s first “marijuana mini mall.” There was so much weed for sale in Trinidad that the community boasted “one pot shop for every 300 people,” according to Amanda Korth, the board president of the Trinidad-Las Animas County Chamber of Commerce. 

This had nothing to do with Trinidad itself—they don’t smoke more weed there than they do in Pueblo—but everything to do with geography. About three hours’ drive from Santa Fe, Trinidad is the closest city in Colorado to New Mexico along Interstate-25. That meant Trinidad was an obvious destination for anyone in New Mexico wanting to buy legal weed—and anyone heading south wanting to make a final pit stop before entering dry country.

In Trinidad, the cannabis border-town boom lasted more than eight years. On April 1, legal cannabis sales began in New Mexico, with the full backing of Gov. Michelle Lujan Grisham, who encouraged New Mexico cannabis entrepreneurs to “knock the socks off of this industry” and—somehow—sell more cannabis per year than even Colorado, a more populous state. Cannabis isn’t as heavily taxed in New Mexico as it is in Colorado, and customers can purchase up to two ounces per day—twice Colorado’s one-ounce limit. And unlike California and Colorado, localities can’t opt-out of sales.

…And Bust

As NPR reported, from the beginning, cannabis dispensaries sprung up throughout the southern and eastern parts of the state, in small towns such as Clovis, in classic truck-stop cities such as Las Cruces—anywhere within driving distance of Texas, where cannabis is still illegal. 

The Las Cruces location of R. Greenleaf, a dispensary chain owned by Colorado-based Schwazze, is now the company’s “highest grossing store,” with visitors from Texas comprising about half of the customer base, said Justin Dye, Schwazze’s CEO, in a recent telephone interview. 

“We’re not there just for the border,” he added, but as data from the first half of the year published by BDS Analytics showed, sales have slowed and plateaued in Colorado overall as they boom in New Mexico. This spells trouble for border towns along the Colorado-New Mexico line—and the beginning of the end for Trinidad’s latest boom.

“You wouldn’t want to buy a store in Trinidad right now,” Dye said. “You wouldn’t want to be an operator there. It’s contracted substantially.” For now, Schwazze and Dye don’t have to worry: Most of their Colorado dispensaries are located in the Denver metro area. Sales are slowing there, too, but at least there’s no concern about out-of-state competition—or a tectonic shift in geography that, such as a factory closing or oil-well going dry, threatens a settlements’ economic vitality. 

This isn’t to say that there’s now nothing doing well in Trinidad—just that the “marijuana mini-mall” and the concentration of dispensaries may have outlived their moment.

Life in the New American West

For Korth, the Trinidad Chamber of Commerce president, this is just another cycle, along with mining, sex changes, and now cannabis. 

“Those industries left, and so it was boom or bust, feast or famine,” she said. “When the marijuana shops came in, it was a great big boom.” But, she added, offering a counterpoint to the boosterism from New Mexico’s Gov. Lujan Grisham, “they said a lot about the taxes and what the taxes would do for schools and roads, etc. And I haven’t really seen a lot of that.”

As for how long the border bet will last elsewhere, it’s a matter of time and politics—and the bizarre situation of rooting against the march of legalization in red states including Texas and Utah, the latter of which is within a short drive from Dinosaur, CO, on that state’s western edge. There are 183 people in Dinosaur, according to Census figures—and there are three dispensaries, an even higher ratio than Trinidad’s.

Dye thinks Texas will remain dry for a while. “I don’t see Texas having a major program for some time,” he said, a situation owing to the Lone Star State’s deep-red conservatism. “I think this is going to be something for a long time around border towns.” 

But there are rumblings to the contrary. Sid Miller, Texas’s ten-gallon-hat-wearing, Trump-supporting agriculture commissioner, recently became the state’s highest-ranking Republican to call for medical-cannabis legalization. If Texas moves even half as quickly as New Mexico, border towns in that state could find their time in the sun shorter even than Trinidad’s — but still part of the same predictable rhythm in the new American west.

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New Mexico Lawsuit Seeks Insurance Coverage for Medical Cannabis

A New Mexico cannabis company and a group of six medical marijuana patients have filed a class-action lawsuit that seeks insurance coverage for medicinal cannabis. The legal action was filed on Friday in Albuquerque state district court, with the plaintiffs arguing that medical cannabis should be covered because it is a valid behavioral health service.

The plaintiffs in the suit are New Mexico Top Organics-Ultra Health and six medical cannabis patients including state Sen. Jacob Candelaria. Documents filed in the case note that Candelaria has been a medical cannabis patient since 2019, when his physician recommended that he use medicinal cannabis to treat post-traumatic stress disorder after antidepressants failed to provide relief. Candelaria pays between $500 and $1,000 per month out of pocket for his medication because his insurer, Blue Cross and Blue Shield of New Mexico, fails to cover medical cannabis for its customers, according to the lawsuit.

With the legal action, the plaintiffs in the case are seeking “recovery for themselves, and for every other similarly situated behavioral or mental health patient unlawfully subjected to paying for the entire cost of medically necessary cannabis, in violation of state law.”

The lawsuit names Blue Cross and Blue Shield of New Mexico, True Health New Mexico, Cigna Health and Life Insurance Co., Molina Healthcare of New Mexico, Presbyterian Health Plan, Presbyterian Insurance Co. and Western Sky Community Care as defendants in the legal action. The lawsuit is based on legislation passed last year, Senate Bill 317, which requires insurers to cover 100% of the costs for behavioral health services, including treatments prescribed for behavioral health conditions. The measure was passed in April 2021 and went into effect on January 1 of this year.

“The idea of health insurance plans paying for medical cannabis may seem like an impossible dream, but all the foundational elements have already fallen into place,” Ultra Health president and CEO Duke Rodriguez said in a statement to the Albuquerque Journal on Monday. “Revolutionizing behavioral health care in New Mexico will take only a few small steps, rather than a giant leap.”

February Letter Sought Coverage for Medical Cannabis in New Mexico

In February, Ultra Health sent a letter to insurers and the Office of the Superintendent of Insurance seeking coverage for medical cannabis recommended to treat behavioral health conditions. The letter included data provided by the New Mexico Department of Health in April that indicates of the 134,307 patients enrolled in the state medical cannabis program, 73,000 have been diagnosed with PTSD.

“Ultra Health acknowledges that the idea of health insurers paying for medical cannabis may seem novel at first blush,” the company wrote in its letter to Presbyterian Healthcare Services. 

“However,” the letter continues, “it is actually a rational, reasonable notion when considered in light of other New Mexico law. New Mexico already requires workers compensation insurers to pay for medical cannabis, and New Mexico already treats medical cannabis the same as conventional prescription medications. The fact that health insurers should—and will—pay for medical cannabis is not revolutionary at this point. It is the next logical step, and it is a small step, not a giant leap.”

True Health New Mexico and Blue Cross and Blue Shield of New Mexico declined to comment on the case, according to media reports. Molina Healthcare of New Mexico, Western Sky Community Care and Cigna did not immediately respond to requests for commentary. Presbyterian Health Plan and Presbyterian Insurance Co., which are overseen by the same management team, also declined to comment on the case but issued a statement on the companies’ policies.

“Presbyterian Health Plan is committed to ensuring that New Mexicans can access the behavioral health services they need,” spokeswoman Melanie Mozes said. “We have not yet been served with the lawsuit and will reserve comment for the appropriate venue.”

Rodriquez said that the lawsuit was filed after the insurers and state regulators failed to respond to the letter sent in February. He also noted that other patients who have been impacted by the insurers’ failure to cover medical cannabis prescribed as a behavioral health treatment are welcome to join the legal action.

“There will be more patients identified who have been harmed by insurers not lawfully abiding to the statutory duty of eliminating any cost sharing related to behavioral health services,” Rodriguez said. “Insurers have not acted in good faith.”

In an interview, Candelaria said that medical cannabis has helped him cope with PTSD and positively affected his life. He added that he joined the legal action to help all “New Mexicans who are struggling to pay for their health care.”

“Senate Bill 317 was transformational,” Candelaria said. “This suit, you know, it becomes necessary to actually make that transformation happen.”

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Border Patrol Warns Against Carrying Pot In New Mexico

New Mexico just became the 18th state to legalize recreational pot use for adults, but that makes no difference to the U.S. Customs and Border Protection, which issued a warning this week for anyone passing through the Land of Enchantment: it is still illegal to us.

“Border Patrol agents have drug enforcement authority. Marijuana is still a prohibited drug under Schedule 1 of The United States Controlled Substances Act. Therefore, U.S. Border Patrol agents will continue to take appropriate enforcement action against those who are encountered in possession of marijuana anywhere in the United States,” the agency said in a media release, as quoted by Border Report.

Recreational pot sales launched in New Mexico late last week, following dozens of other states and cities that have enacted their own measures to end their prohibition on cannabis over the last decade. 

But the admonition from the Border Patrol is a reminder that customers should still tread carefully if they happen to be carrying in the state. As Border Report noted, “Border Patrol operates highway checkpoints in New Mexico on Interstate 10 near Deming, north of Las Cruces, south of Alamogordo and north of Columbus, among others,” and agents who are situated there “primarily check for immigration documents of people traveling to the interior of the United States, but they also make drug seizures under Title 21 authority of the U.S. Code.”

And, as in other states, New Mexico hailed the new policy as an economic driver for state and local economies.

“As we look to rebound from the economic downturn caused by the pandemic, entrepreneurs will benefit from this great opportunity to create lucrative new enterprises, the state and local governments will benefit from the added revenue and, importantly, workers will benefit from the chance to land new types of jobs and build careers,” New Mexico Governor Michelle Lujan Grisham said in a statement after signing the legalization bill into law last year.

“This legislation is a major, major step forward for our state,” Lujan Grisham, a Democrat, added. “Legalized adult-use cannabis is going to change the way we think about New Mexico for the better — our workforce, our economy, our future. We’re ready to break new ground. We’re ready to invest in ourselves and the limitless potential of New Mexicans. And we’re ready to get to work in making this industry a successful one.”

But the warning issued by the Border Patrol captures what has been the defining tension of this era of legalization, with the new state and local cannabis laws invariably running afoul of the federal government’s ban on cannabis. 

It is why Congress is facing mounting pressure to finally change that. The U.S. House of Representatives last week passed the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, which would legalize cannabis on the federal level. 

The legislation now heads to the Senate, where leaders say they intend to produce their own legalization proposal by month’s end. 

At a press conference on Tuesday, Senate Majority Leader Chuck Schumer said he is consulting Republicans in the chamber to see what they would like added to the cannabis bill.

The MORE Act passed the Democratic-controlled House largely on a party-line vote.

For Schumer, getting something done will represent the fulfillment of a promise his party made last year after they were swept into power. In an interview last spring, Schumer said that “at some point we’re going to move forward [on legalization], period.”

“In 2018, I was the first member of the Democratic leadership to come out in support of ending the federal prohibition. I’m sure you ask, ‘Well what changed?’ Well, my thinking evolved. When a few of the early states — Oregon and Colorado — wanted to legalize, all the opponents talked about the parade of horribles: Crime would go up. Drug use would go up. Everything bad would happen,” Schumer said at the time

“The legalization of states worked out remarkably well. They were a great success. The parade of horribles never came about, and people got more freedom. And people in those states seem very happy.”

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New Mexico Recreational Pot Sales Surpass $3 Million in Opening Weekend

Three days and millions of dollars later, the New Mexico adult-use cannabis industry is off to a roaring start.

Local television station KOAT reports that, as of noon on Sunday, recreational pot sales in the state had eclipsed $3 million.

The station, citing state officials, said that 49,552 transactions for recreational cannabis transactions had been recorded at that time, which totaled $3,092,712.

Sales officially kicked off after midnight on Friday, when hundreds of eager customers lined up outside the dispensaries in anticipation of the historic opening.

New Mexico is the 18th state to legalize recreational pot use for adults after its Democratic governor,  Michelle Lujan Grisham, signed a bill into law last spring.

“The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” Lujan Grisham said in a statement at the time. “We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed War on Drugs. And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better.”

From the start, Grisham has hailed legalization as a force for economic prosperity in the state. After signing the legislation into law last year, her office said that “sales of adult-use recreational cannabis could amount to $318 million in the first year, creating over several years what could be more than 11,000 new jobs.” Her office added “that the excise tax will raise at least $20 million for the general fund in the first full fiscal year, with significant growth in subsequent years.”

“As we look to rebound from the economic downturn caused by the pandemic, entrepreneurs will benefit from this great opportunity to create lucrative new enterprises, the state and local governments will benefit from the added revenue and, importantly, workers will benefit from the chance to land new types of jobs and build careers,” Lujan Grisham said in a statement after the bill signing.

“This legislation is a major, major step forward for our state,” the governor added. “Legalized adult-use cannabis is going to change the way we think about New Mexico for the better — our workforce, our economy, our future. We’re ready to break new ground. We’re ready to invest in ourselves and the limitless potential of New Mexicans. And we’re ready to get to work in making this industry a successful one.”

As recreational pot sales launched throughout the state on Friday, Lujan Grisham visited a dispensary in Albuquerque.

Local television station KRQE reported that the governor “didn’t buy anything herself,” but did spend about a half-hour at the store conversing with customers and employees.

“I’m excited, this is what New Mexicans said they wanted,” Lujan Grisham said, as quoted by the station. “They said they wanted it long before was I running.”

While she didn’t procure any bud to take back to the governor’s mansion, Lujan Grisham didn’t rule out a purchase in the future.

“I don’t have to decide today, because it’s not going to end today. It’s going to stay forever,” she said, according to KRQE.

According to local television station KOAT, more than $4.5 million in total cannabis sales had been reported in New Mexico last weekend, including medicinal cannabis.

On Friday, there was $1.96 million in recreational cannabis sold in New Mexico, according to the station.

“By noon Friday, recreational sales had reached $476,000. About 70 percent of all cannabis sales Friday were for recreational use,” the station reported.

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Adult-Use Cannabis Sales Launch In New Mexico

The New Mexico adult-use cannabis market is officially open for business.

After the clock struck midnight on Friday, newly minted cannabis retailers opened their doors to customers eager to make an inaugural purchase. 

According to the Las Cruces Sun News, “a few hundred people” lined up outside one store in Las Cruces, the state’s second largest city that had “several” stores commemorating the historic day by opening at 12:01 a.m.

One customer, Jeremy Sandoval, lined up outside the store at 6:30 p.m., according to the newspaper.

“It’s been a long time coming,” Sandoval said, as quoted by the Las Cruces Sun News. “We’ve all been waiting for it. It’s a milestone in the road ahead of us.”

The midnight openings were unique to Las Cruces. As the Sun News noted, the city is one of the only major cities in the state that has yet to establish operating hours for the cannabis retailers, “which is why these local dispensaries were able to have these midnight debuts.”

New Mexico is the 18th state to legalize recreational cannabis use for adults. The state’s Democratic governor, Lujan Grisham, signed a bill enacting the law last April, hailing it as a potential economic boon for New Mexico.

The governor’s office, citing the analysis of an independent economist, said that “sales of adult-use recreational cannabis could amount to $318 million in the first year, creating over several years what could be more than 11,000 new jobs.”

“The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” Grisham said in a statement at the time. “We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed War on Drugs. And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better.”

Grisham’s office estimates “that the excise tax will raise at least $20 million for the general fund in the first full fiscal year, with significant growth in subsequent years,” and that local governments “will also benefit from the added revenue.”

“As we look to rebound from the economic downturn caused by the pandemic, entrepreneurs will benefit from this great opportunity to create lucrative new enterprises, the state and local governments will benefit from the added revenue and, importantly, workers will benefit from the chance to land new types of jobs and build careers,” Grisham said in the statement last year.

Democratic state House Representative Javier Martinez said at the time that the state had “seized a once-in-a-lifetime opportunity to establish a multi-million industry with a framework that’s right for our state and will benefit New Mexicans for generations to come.”

The new law states “anyone 21 and older can purchase up to two ounces (57 grams) of marijuana enough to roll about 60 joints or cigarettes—or comparable amounts of marijuana liquid concentrates and edible treats,” according to the Associated Press.

Late last year, the state’s Cannabis Control Division issued the final slate of rules for the adult-use program, most notably for manufacturing of cannabis in the state.

“Every day brings us closer to the first adult-use cannabis sales in New Mexico,” Cannabis Control Division Director Kristen Thomson said in a statement at the time. “Thanks to the Cannabis Control Division’s open and transparent rule-making process over the past six months, businesses and consumers can be confident that all necessary support and protection is in place to ensure a thriving cannabis industry in our state.” 

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Will New Mexico Have Enough Weed for the Launch of Adult-Use Sales?

With the launch of recreational cannabis sales in New Mexico slated for April 1, state officials say that cultivators are currently growing more than one million cannabis plants. But with the opening of dispensaries now only days away, industry insiders are questioning the state’s figures and wondering if there will be sufficient supplies of cannabis for consumers and medical patients.

This week, the state Regulation and Licensing Department’s Cannabis Control Division (CCD) announced that licensed cannabis growers have entered 1,013,178 mature plants into a statewide tracking system. The figure is more than twice as many plants as state officials estimate will be needed to serve the state’s 132,000 registered medical cannabis patients and recreational customers. Last summer, Linda Trujillo, superintendent of the Regulation and Licensing Department, told lawmakers that the cannabis industry will need about 500,000 plants to satisfy demand.

But some representatives of the state’s cannabis industry have questioned the number of plants in cultivation reported by state officials. Duke Rodriguez, president and CEO of New Mexico Top Organics-Ultra Health, told the Santa Fe New Mexican that the number is “impossible,” saying that it would require “football fields after football fields” of land to grow that many cannabis plants. Jason Greathouse, co-owner of Roswell-based Pecos Valley Production, also expressed disbelief at the state’s plant count.

“If there are a million cannabis plants in the state, I don’t know where they are,” said Greathouse. “Are they legal plants? Are they illegal plants?”

“I only have 3,000 plants in the ground,” he added, although he plans to have 20,000 by June.

Heather Brewer, a spokeswoman for the CCD, said on Tuesday that the state’s plant total is accurate, noting that it reflects information from the state’s seed-to-sale tracking system BioTrack. The data is entered by cannabis cultivators themselves, so “assuming all the information was appropriately entered, that number is accurate,” she said.

Regulators Increase Cannabis Production Limits

Early this year, CCD director Heather Thomson announced the adoption of emergency regulations to increase the plant limits for cannabis cultivators. Under the temporary rules, most growers were allowed to cultivate twice as many plants.

“We have been listening to producers, consumers and patients who are as committed as the Cannabis Control Division is to supporting a thriving cannabis industry in New Mexico,” Thomson said in January. “Doubling the plant count for licensed producers makes sense to ensure that everyone can maximize the benefits of a thriving cannabis industry.”

But Rodriquez said he does not believe that the state’s cultivators have sufficient cannabis to avoid shortages once adult-use dispensaries open on April 1.

“What we have today is what we are going to serve the market. Is it going to be enough? The answer is no,” Rodiguez said. “On day one it’s going to be a challenge as it’s going to be a challenge for maybe as long as 9 to 12 to 18 months.”

But regulators believe that there will be enough cannabis, with any temporary shortages being quickly rectified.

“I cannot imagine this nor do we anticipate stores selling completely out. Unless they were only selling one product,” Thomson said.

Brian Vicente, a founding partner of cannabis law firm Vicente Sederberg LLP, said that “New Mexico is entering an exciting new post-prohibition era” with next week’s launch of adult-use cannabis sales.

“The Governor and regulators have shown a keen interest in assisting this growth industry, while balancing the needs of various community members,” Vicente wrote in an email to High Times. “When a new state begins recreational sales, it is common to experience fluctuations in cannabis supply, as this new market settles.”

After speaking to a number of New Mexico producers, Vicente said that businesses are eager to supply the state’s new recreational cannabis market and are working to address concerns of potential product shortages.

“However, given the novel nature of this April 1 recreational launch, it’s certainly possible that demand will outstrip supply in the short term, and we may see limitations on purchase amounts or other measures to address high demand,” Vicente said.

Barbara Crawford, owner of medical pot cultivator Southwest Cannabis in Taos, New Mexico, has nearly doubled the capacity of her operation over the past two years to about 3,500 plants. But even with the new investments in production, she noted that it takes time to grow plants to maturity and harvest.

“That’s just the reality of this business,” Crawford told the Taos News. “I think we’re gonna get there eventually, but there’s going to be a shortage come June. I don’t care how many stores there are.”

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New Mexico Ups Cannabis Production Limits As Adult-Use Sales Loom

Less than three months before legal sales of recreational cannabis begin in New Mexico, state regulators have increased production limits placed on adult-use cannabis cultivators. Under emergency regulations that went into effect last week, most licensed cannabis producers will be permitted to grow twice as many plants as previously allowed.

Kristen Thomson, director of New Mexico’s Cannabis Control Division, said that the rule change is designed to help spur the launch of the state’s newly regulated adult-use cannabis industry, which is slated to begin sales of recreational marijuana by April 1.

“We have been listening to producers, consumers and patients who are as committed as the Cannabis Control Division is to supporting a thriving cannabis industry in New Mexico,” Thomson said on Monday in a statement quoted by NM Political Report. “Doubling the plant count for licensed producers makes sense to ensure that everyone can maximize the benefits of a thriving cannabis industry.”

Under the emergency rules, which will remain in effect until July, cannabis cultivators with a Level 4 license will be permitted to grow between 12,001 and 16,000 cannabis plants, while Level 3 license holders will be allowed 6,001 to 12,000 plants. Level 2 growers will be permitted to cultivate 2,001 to 6,000 plants, and Level 1 growers will be able to maintain 401 to 2,000 marijuana plants. Thomson explained the rule change in documents filed with the state’s Commission of Public Records.

“The Division has considered demand estimates provided by applicants and licensees in the cannabis industry,” Thomson wrote. “Projected market demand shows that the demand for regulated cannabis will increase year-to-year as more cannabis consumers move from the illicit market to the regulated market. The supply of medical cannabis will become increasingly threatened without an adequate supply of plants.”

Plant limits for micro-producers, however, will not be increased by the emergency rules. Operations of such small growers will still be limited to 200 plants, a cap set by state law that regulators are not authorized to override. The director said the department would seek a legislative fix that would allow micro-producers a similar increase in production limits.

“Equity and fairness are foundational principles of New Mexico’s vision for the state’s cannabis industry,” Thomson said. “We will work with legislators and the governor to ensure those values are upheld and that micro-producers see increased plant count limits as soon as possible.”

Caps Put in Place to Prevent Overproduction in New Mexico

The plant limits on cultivators were included in New Mexico’s cannabis regulations to prevent overproduction. Regulators feared a glut of cannabis that would cause prices to drop dramatically, a scenario that might challenge small operators trying to gain a foothold in the nascent industry.

But last summer, Linda Trujillo, superintendent of the New Mexico Regulation and Licensing Department, which oversees the Cannabis Control Division, warned that supplies of recreational marijuana would be tight once adult-use sales begin in the state.

“It’s highly likely we will run out of cannabis in the first week, if not the first two weeks,” she said at a meeting of the legislature’s Economic Development and Policy Committee on July 26. Trujillo told lawmakers that her prediction is based on the experience of other states as they launched adult-use cannabis sales.

Limits on cannabis production were first put in place under New Mexico’s medical marijuana program. Ultra Health, one of the state’s largest producers of medicinal cannabis, has sued the state over the caps, arguing that they are too low to serve New Mexico’s patient population. On Monday, the company said that the production limits on adult-use cannabis are also insufficient.

“Unfortunately, this increase may be too little, too late,” a spokeswoman for Ultra Health wrote in a statement to local media. “Sales to adults will commence in 74 days, and it takes twice as long, five months, for cannabis to be fully prepared from seed to sale. We are running on a deficit to support 130,000 patients today, so to think this new rule would somehow alter the biological processes required to grow cannabis is naive, at best.”

Ben Lewinger, the executive director of the New Mexico Cannabis Chamber of Commerce, applauded state regulators for considering potential shortages that would negatively impact those relying on steady supplies of medical cannabis.

“Protecting patients and patient supply is absolutely critical and has been a first-order priority through recent legislative and rulemaking processes, and we’re grateful that the Cannabis Control Division is working to ensure that medical cannabis patients aren’t neglected as the state shifts to legalized cannabis for adults,” he said.

But Lewinger questioned the rule change, saying that doubling the cap on plants only weeks before legal sales begin “undermines the work of legislators and advocates” who advocated for production limits to allow equitable access to participation in the new recreational cannabis economy. 

“Building the infrastructure to double plant count could take months to years for most operators, and plants put in the ground today won’t be ready in April,” Lewinger said. “Increasing the plant count now will only help the very biggest and well-resourced producers—it won’t help medical cannabis patients and it won’t help new businesses trying to break into the industry.”

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New Mexico Releases Final Adult-Use Cannabis Rules

The New Mexico Cannabis Control Division (CCD) announced on December 28 that it has finalized the rules for cannabis manufacturers, retailers and couriers. The final rules were published in Issue 24 of the New Mexico Register. Hundreds of applications for licenses are currently under review. 

The rules are effective immediately, with last-minute revisions following several rounds of public comment from small business owners, CEOs and other businesspeople. 

“Every day brings us closer to the first adult-use cannabis sales in New Mexico,” Cannabis Control Division Director Kristen Thomson said in a press release. “Thanks to the Cannabis Control Division’s open and transparent rule-making process over the past six months, businesses and consumers can be confident that all necessary support and protection is in place to ensure a thriving cannabis industry in our state.” 

Under the state Cannabis Regulation Act, adult sales in New Mexico are scheduled to begin by April 1, 2022. The rules that took effect Tuesday include manufacturing rules that replace emergency manufacturing rules implemented last fall, with intentions to protect workers and improve workplace safety.

The rules outline the licensing of retail stores, with new restrictions. The courier rules set guidelines for safe delivery and proper distribution of cannabis products by licensed couriers. 

According to a news release, the CCD has been accepting manufacturing and retail license applications through its online licensing system and has received more than 300 submitted applications total across all industry sectors. 

“Our dedicated team of professionals is working hard through the holidays and… every day to work with applicants to get licenses issued and businesses up and running,” Thomson said. “Standing up a thriving new industry is no small feat, and I know that our team, our system and New Mexico’s prospective licensees are up to the challenge. New Mexico will be ready for adult-use sales in 2022.”

Manufacturing Rules

Manufacturers are also prohibited from adding nicotine or caffeine to cannabis products under the final rules, but naturally-occuring caffeine is tolerated. Manufacturing licenses are divided into four classes:

  • Class I: packaging and re-packaging of already-made products
  • Class II: manufacturing of edibles or topical products from already-extracted products; can also conduct Class I activities
  • Class III: manufacturing of extracts (extracting) using mechanical methods and nonvolatile solvents; can also conduct Class I and Class II activities
  • Class IV: manufacturing of extracts (extracting) using volatile solvents or supercritical CO2; can also conduct Class I, Class II, and Class III activities

Retail Rules

Once retail sales begin on April 1, 2022, customers ages 21 and over, and people 18 and over who possess a valid qualified patient, primary caregiver or reciprocal participant registry identification card, will be allowed inside.

Retailers can take cannabis out of the packaging to display for customers, but the displayed product cannot be sold or consumed, and it must be destroyed. Retailers are also prohibited from providing free samples. Many other restrictions apply.

Courier Rules (Delivery)

The maximum retail value of products that a courier can carry is $10,000, and couriers are not allowed to carry packages for delivery for more than 24 hours. Delivery recipients will have their identity Delivery recipients must either over 21 or older, or be 18 or older as a qualified medical cannabis patient or primary caregiver, and must be pre-verified electronically before a courier delivers cannabis.

The full list of final rules can be found on the New Mexico Commission of Public Records.

The New Mexico Regulation and Licensing Department had issued a license to the first company, Mother’s Meds, to operate as a cannabis cultivator on November 1.

Deadlines were tight, but the state’s leadership pulled together. The final rules are in place four months ahead of the plan for adult-use cannabis sales. Under the Cannabis Regulation Act, which was passed earlier this year, cannabis industry rules need to be in place by January 1, 2022, and adult-use cannabis sales will start by April 1, 2022. 

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New Mexico Cannabis Raid Spotlights Native American Jurisdictional Dilemma

A federal raid on a household cannabis plot on tribal land in northern New Mexico’s Sangre de Cristo Mountains is sparking controversy over who has how much enforcement authority on Native American reservations. As more states embrace legal adult-use cannabis, a lack of clarity persists on the question of how much power the state, federal and tribal governments have on these lands.

On Sept. 9, agents from the US Bureau of Indian Affairs (BIA) confiscated nine plants from a garden at the Picuris Pueblo home of Charles Farden, 54, a life-long reservation resident who is not actually Native American. Farden is enrolled in the New Mexico medical marijuana program, to treat post-traumatic stress and anxiety.

Farden told the Associated Press he was shocked to be put in handcuffs as federal agents uprooted his plants, which were then thick with buds—about a year’s personal supply, by his estimate. 

“I was just open with the officer, straightforward. When he asked what I was growing, I said, ‘My vegetables, my medical cannabis,’” Farden told the AP. “And he was like, ‘That can be a problem.’”

Federal Law Comes First?

New Mexico’s legislature approved a medical marijuana program in 2007, while Picuris Pueblo instated its own parallel program for tribal members in 2015. 

As Picuris Gov. Craig Quanchello told Albuquerque’s The Paper: “We’re exercising our sovereignty. We went through our community and said, OK, this is what’s going on. This is what we want to do. How does the community feel about cannabis from the medical side? …We wanted to provide an alternate medicine for our community people, and we wanted options… We wanted to have an affordable medicine.”

And this is going to become a more pressing question as the Land of Enchantment gets a legal adult-use market. This April, New Mexico’s Gov. Michelle Lujan Grisham signed a general cannabis legalization bill, which took effect in June—permitting up to six plants per individual or 12 per household for personal use, with no weight limit. Commercial sales are set to begin next April. At least two of New Mexico’s 23 federally recognized tribes are seeking an agreement with the state allowing them to operate cannabis businesses—Picuris and Acoma Pueblo.

But the feds, of course, do not recognize any state legalization law. And it is the feds that share law enforcement responsibilities with the governments of federally recognized tribes. This is especially an issue for Picuris, a small pueblo that does not maintain its own police force, relying on BIA officers to enforce tribal laws. The specter of BIA raids could put the kibosh on plans for retail outlets on the pueblos.

In a recent letter to Gov. Quanchello obtained by the Associated Press, a BIA special agent in charge said the agency won’t instruct its officers to relax enforcement on the reservations—and that cannabis cultivation remains a federal crime, notwithstanding any changes to state or tribal law. 

“Prior notification of law enforcement operations is generally not appropriate,” the letter stated. “The BIA Office of Justice Services is obligated to enforce federal law and does not instruct its officers to disregard violations of federal law in Indian Country.”

Officials with the BIA and Interior Department, which oversees the agency, did not respond to the AP’s request for comment on the matter. Farden has not been hit with any criminal charges. 

Prelude at Picuris

The September bust at Picuris also had a prelude about four years earlier. On Nov. 30, 2017, agents from the BIA’s Division of Drug Enforcement arrived at the pueblo to uproot and confiscate a medical marijuana “test plot” of 36 plants that had been established on land under the control of the tribal government. 

News gets out slowly in this rugged and remote part of the state, even today, and it wasn’t until the following November that the raid was written up by the Albuquerque Journal. “They took the plants and threatened to prosecute us,” Gov. Quanchello told the newspaper.

A year later, there had still been no arrests or prosecutions. But the test plot was not replanted. 

Gov. Quanchello emphasized that the pueblo had been totally open with state and federal authorities about what they were doing.  “We even told them if they ever want to raid us, here’s where you need to go,” he told the Journal.

Contacted by the Journal for comment about the raid, the US Attorney’s Office in Albuquerque sent this terse reply via email: “The matter about which you inquire was investigative in nature and, as a matter of policy, Justice Department agencies, including the US Attorney’s Office, do not comment on investigative matters.” 

Negotiating a Solution

This September’s second raid at Picuris has dampened hopes that the situation would improve under the new administration of Joe Biden. 

In its account of the new raid, the Associated Press quoted Portland-based criminal defense attorney Leland Berger, who last year advised the Oglala Sioux Tribe of South Dakota after it instated a cannabis program. Berger implicitly noted the 2014 Wilkinson Memo, which instructed federal prosecutors not to interfere with cannabis sales or cultivation on tribal lands. “It’s remarkable for me to hear that the BIA is enforcing the federal Controlled Substances Act on tribal land where the tribe has enacted an ordinance that protects the activity,” he said. 

As the AP noted, other Native American nations around the country have successfully reached accommodations with state and federal authorities—if informally in the case of the latter. 

In Washington, the Suquamish Tribe in 2015 reached a “compact” with the state to open a retail cannabis outlet just across Puget Sound from Seattle on their Port Madison Reservation.

In Nevada, several reservations now operate dispensaries, bringing their own tribal laws into conformity with the state medical marijuana program and adult-use regulations.

In South Dakota, the Oglala Sioux last year became the only tribe to establish a cannabis market without parallel state regulations, approving both medical and adult use in a March referendum at the Pine Ridge Reservation. That November, a statewide referendum legalized adult-use cannabis in South Dakota, although the state supreme court this November barred it from taking effect.

Sometimes the federal presence on tribal lands is welcomed by reservation governments. President Biden this November ordered several federal agencies to coordinate a new effort to combat human trafficking and crime in Indian Country, where rates of violence are more than twice the national average. But the boundaries between tribal and federal power have long been contested. As Berger told AP: “The tribes are sovereign nations, and they have treaties with the United States, and in some cases there is concurrent jurisdiction… It’s sort of this hybrid.”

‘We Are Being Discriminated Against’

Cannabis Now reached Gov. Craig Quanchello by phone at Picuris Pueblo. He fills in some details on the two raids at the reservation.

Of the medical marijuana test plot that was destroyed in November 2017, he stresses the tribal government’s effort to be transparent. “We met with the US Attorney’s office, and the [Taos] county and state officials, to let them know what we were doing. Our program mirrored the state’s, but we added PTSD and opioid abuse as treatable conditions.” 

Nonetheless, in the 2017 raid, “They brought in dogs and surveillance airplanes—basically shutting down our world. At that point we were hesitant to go forward.”

With new administrations in both Washington and Santa Fe, the tribe was just beginning to get over this hesitancy this year. House Bill 2, the legalization measure signed by Gov. Lujan Grisham on April 12, includes a provision for “intergovernmental agreements with Indian nations, tribes and pueblos.”

Then came this November’s raid on Charles Farden, a non-Native who is married to a tribal member and is enrolled in the state medical marijuana program. “The pueblo recognizes the state card,” Quanchello says.

Quenchello sees cannabis as an obvious option for the mountain-locked pueblo, where the already meager economy has been hit hard by the COVID-19 pandemic.  

“We’re farmers by nature,” he says. “We’ve always grown our traditional crops—corn, hay, alfalfa. We don’t have much population, but we have land. We see this as a means of economic development.”

And he portrays the willingness to work with the state government as a matter of good faith. “We don’t have to,” he asserts. “We are sovereign. But we want to do it, in a spirit of teamwork.”

Yet he’s open about his frustration at two federal raids, even as other reservations around the U.S. have been given some breathing room.

“Why is the BIA picking on us, the smallest pueblo in New Mexico, with no gaming and not on a traffic route? The money is not going to go into anyone’s pocket, it’s going back to the community—to provide healthcare for our kids, our elders. We don’t get enough federal funds to operate, and the funds are dwindling every year. We’re being discriminated against here.”

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