New Mexico Health Department Quietly Issued a Last-Minute Cultivation License Before Handing Over Control of the Program

Sep 15, 2021

By: Douglas R. Sargent, Partner and David Standa, Partner

As we previously wrote about here, New Mexico’s Cannabis Control Division began accepting applications for cannabis cultivation licenses late last month. However, according to the Santa Fe New Mexican, before control of the cannabis program transferred to the CCD, something interesting happened and it has many in the industry calling foul. Back in June, the New Mexico Department of Health quietly issued a medical cannabis producer license for the first time in six years. The issuance happened less than a week before the Department transferred control of medical marijuana program to the newly created CCD, which in itself was odd, but what really drew the ire of those interested in the New Mexico market is that the Department didn’t let anyone know the license was available. Indeed, only one application was submitted and the details of the application process certainly create some questions.

According to the New Mexican, on June 23 the Department posted an announcement on its website titled “Medical Cannabis Licensed Non-Profit Producer Application Instructions.” The announcement did not explicitly state the department was accepting new applications, and the agency didn’t advertise the application window or otherwise make the public aware of the opportunity. In what might have been a moment of clairvoyance, one company deciphered the announcement and prepared an application. And not just any application. Albuquerque-based GH LLC submitted a 713-page application on June 25 – two days after the announcement was posted. Then on June 27 – two days after the massive application was submitted – the director of the state’s Medical Cannabis Program and the deputy secretary of the Department, personally inspected the company’s facilities. The department then issued the license the following day.

The Department defended its actions via its spokeswoman Baylee Rawson who wrote an email to the Santa Fe New Mexican saying the Department “often posts announcements through the website,” and that “is also one of the primary methods used to present information and updates about the program including meeting announcements, patient statistics, educational materials, and other reports and documents.” Industry insiders don’t buy it. Willie Ford, managing director of Reynold Greenleaf & Associates, a consulting firm for cannabis businesses called it “a dirty affair,” and said it was “obviously somebody making it happen for somebody else.” Duke Rodriguez, president and CEO of New Mexico Top Organics-Ultra Health, the state’s largest medical cannabis operation said “[t]his new licensee process has certainly ignited a fair amount of distrust, raised eyebrows and questions.”

It is clear this entire process is now under the microscope and it will likely result in additional scrutiny for the next round of licenses that will be issued by the CCD starting in late November. We are continuing to monitor the entire situation in New Mexico and if you have any questions or need assistance applying for cannabis licenses there, please contact Doug Sargent (doug.sargent@gmlaw.com; 773-395-1548) or David Standa (david.standa@gmlaw.com; 773-395-1562).

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