Judge Invalidates New Mexico Cannabis Regulations as Without ‘Evidence’

SANTA FE, N.M. – A district judge in New Mexico invalidated cannabis industry regulations handed down by the New Mexico Department of Health (NMDOH) and its Medical Cannabis Program. 1st District Court Judge Bryan Biedscheid said in his decision that the regulations “were not supported by substantial evidence.” He also ordered the regulations to be rewritten.

“We are aware of the decision and are reviewing options. The department does not otherwise comment on pending litigation,” a NMDOH spokesperson told mg about the decision.

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The regulations were initially proposed in October 2019, and eventually approved by state officials last June.

The approval spurred New Mexico-based medical cannabis company Ultra Health to file a petition with the court in July, to invalidate the rules as “arbitrary and capricious.”

Medical cannabis company Pecos Valley Production quickly followed suit and also filed a petition in the 1st District Court of New Mexico to repeal the regulations.

Both petitions were filed under the same case, and additional petitioners eventually included two more medical cannabis companies, a manufacturer, a testing lab, and a patient.

The complaints also accused the state of using regulations copied from other states as a model, instead of consulting with New Mexico medical cannabis industry members and businesses.

“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 Pecos Valley petition read.

Additional accusations included the state’s failure to consult with its Small Business Regulatory Advisory Commission, to determine if the policies would have an unnecessarily burdensome effect on the state’s medical cannabis industry businesses.

The suit also asserted the state had not made public the technical processes of its rule-making, violating its obligations to the public, especially affected parties.

Lawyers for the companies added that a request to the NMDOH for the rule-making record had been delayed.

Regulations that were overturned by the judge’s ruling included:

  • Suspension or revocation of a license without notice.
  • Prohibition of the growing of hemp plants on property licensed for medical cannabis cultivation.
  • Prohibition of hemp, hemp extract, and hemp derived products other than hemp paper and hemp seed oil to be combined with usable cannabis intended for sale.
  • Testing requirements that set extremely strict action levels for microbes, mycotoxins, heavy metals, and pesticides.
  • Requiring cannabis producers, manufacturers, and testing laboratories obtain department approval before making “any physical modification or addition” to their facilities.
  • Requiring all cannabis producers and manufacturers to have floors, walls, and ceilings that are washable, wipeable, and non-absorbent.
  • Mandating a hazard analysis critical control point plan (HACCP) for each product a manufacturer produces.
  • Requiring onerous, duplicate product labeling.

After the decision, state medical cannabis businesses will continue to operate under previous regulations.

“The judge’s ruling has a huge effect on Ultra Health’s operations and every other cannabis producer in New Mexico,” Ultra Health Chief Marketing Officer Marissa Novel told mg.

“Operators won’t have to fear the suspension or revocation of their license without notice, ask for department approval before upgrading or making the simplest modifications to their facilities, pour capital into modifying their cultivation, manufacturing, and laboratory facilities to meet unreasonable specifications, and more,” Novel said. “Essentially, this ruling allows cannabis operators to invest in their growth rather than dedicating excessive time, money, and energy to complying with regulations that simply don’t make sense for the industry.”

The judge’s decision comes when state legislators from both sides of the aisle seem anxious to push legalization of recreational cannabis in the state, which currently only allows medical cannabis sales.

Senate Bill 13 was introduced this week by Senator Daniel Ivey-Soto (D-N.M.). The bill would create a regulatory agency to oversee adult-use sales in the state, while leaving existing regulatory infrastructure for medical marijuana “intact,” according to the Santa Fe New Mexican newspaper.

Senate Bill 288 also was introduced this week by Senator Cliff Pirtle (R-N.M.) and would set up tax rates for recreational cannabis while creating a Cannabis Control Commission to oversee the state’s recreational cannabis program.

“It’s been my belief that if you’re not hurting anyone else, you’re not showing up to work [intoxicated], you’re not posing to be a threat to other people, that the use of marijuana in someone’s private home is their business.

“So, as long as we ensure that businesses can maintain a drug-free, no-tolerance workforce and people are not using it in public and those types of things, I think it’s something that I can support,” Pritle told the newspaper.

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