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New Mexico medical cannabis producers want higher plant counts to avert ‘crisis of supply’

Daniel Chacn / Santa Fe New Mexican
Published on April 14, 2021

A day after recreational marijuana for adults became the law of the land in New Mexico, some of the state’s leading medical cannabis producers asked for a significant increase in plant counts to avert what they say could be a “crisis of supply” for people who use the drug as medicine.

Commercial sales won’t begin in New Mexico until next year at the earliest, but the group of producers contends the new law nullifies purchase limits on medical marijuana patients, who they predict will take advantage of the much higher caps when the new law takes effect June 29.

“Something must be done immediately to raise the level of production — and not by a small amount,” Duke Rodriguez, president and CEO of New Mexico Top Organics-Ultra Health, the state’s largest medical cannabis operation, said in a telephone interview Wednesday.

 

Under the state’s Medical Cannabis Program, patients can buy up to 230 grams, or about 8 ounces, of cannabis or cannabis products over a rolling 90-day period.

Under the Cannabis Regulation Act, which Gov. Michelle Lujan Grisham signed into law Monday, adults 21 and older will be allowed to buy up to 2 ounces of cannabis, 16 ounces of cannabis extract or 800 milligrams of edible cannabis “at one time.”

In a letter sent Tuesday to the state Department of Health and the Regulation and Licensing Department, the group of medical cannabis producers contends the higher purchase limits will be applicable to New Mexico’s estimated 112,000 medical marijuana patients in about 75 days, potentially creating a shortage in supply.

“In sum, on June 29, 2021, the 30-plus licensed medical cannabis producers should be prepared for patients to purchase two ounces of cannabis, sixteen grams of extract, and 800 milligrams of edible cannabis at any one time,” the group wrote in the letter.

“Furthermore,” they wrote, “because the Legislature affirmed the Court of Appeals’ interpretation that medical cannabis is exempt from gross receipts tax, the price of cannabis will come down slightly, enabling patients to buy more than they have previously purchased.”

The group of producers wrote it’s their “common experience” that patients don’t buy as much cannabis as they truly want to buy.

“They buy what they are legally allowed to buy, they buy what is available, and they buy what they can afford. The illicit market provides the rest,” they wrote. “If patients can lawfully buy more from licensed producers, they will buy more, and if they can afford more because of the modest relief from sales tax, they will buy more. It would be truly unfortunate, and it would jeopardize the health of more than 112,000 medical cannabis patients, if the medical cannabis supply ran out as patients took advantage of the more generous purchase limits.”

Spokespeople for both departments declined to comment, saying only that the letter is under review. Asked whether the more generous purchase limits would apply to medical cannabis patients starting June 29, one of the spokespeople, Jim Walton of the Department of Health, responded in an email, “This is one of the questions we are waiting for legal to review.”

Rodriguez said producers have been raising the concern “way back in time, and now the reality has set in” after the governor signed the bill into law.

“This is not one of those fine-tuning issues,” Rodriguez said. “This is a major policy issue that we all have to be prepared and certainly now need to act upon.”

Plant counts would have to grow considerably to keep up with the anticipated demand, according to Rodriguez and the letter signed by the other producers, including G&G Genetics, Budding Hope, Kure and Sacred Garden.

The group indicated the state Regulation and Licensing Department, which is poised to assume control of the Medical Cannabis Program on June 29, could be facing a public relations nightmare.

“It would not bode well for RLD’s public image as the regulator of cannabis if the medical cannabis program descended into chaos on June 29,” the letter states. “New Mexicans, both citizens and legislators, are looking to RLD to smoothly manage the transition to a full commercial market, and if RLD allows the medical cannabis program to degrade further, public criticism will not be withheld.”

The group indicated litigation is “likely” if the state doesn’t take action to “secure the medical cannabis supply.”

“It has always been our belief that litigation is not the preferred path,” said Rodriguez, a former secretary of the New Mexico Human Services Department. “Unfortunately, in the past, we’ve had to consider it the only path. I hope in the future that isn’t our reality.”

Rep. Javier Martínez, one of the primary sponsors of the new law, said via text he would defer to regulators on any questions regarding the transition from the current medical-only cannabis program to the combined medical- and recreational-use system enacted under the measure.

“I have the utmost confidence in RLD to ensure the timely and seamless implementation of the [Cannabis Regulation Act], while also protecting patient access to medicine,” he wrote.

In its letter, the group asked the state to raise the plant limitation until the full commercial market can be phased in.

The Department of Health’s rules “already contemplate an increase in the coming months,” the group wrote, adding licensed producers will be able to apply for an extra 1,000 plants after June 1.

“Releasing extra plants in April 2021 is not unreasonable when DOH [Department of Health] already contemplated releasing extra plants in June 2021. While not sufficient, an additional 1,000 plants per producer would be the lowest amount the DOH could possibly consider. In fact, a much greater increase is necessary,” the letter states.

New Mexico’s 34 licensed producers are authorized to grow up to 1,750 plants each. The group that wrote the letter to the state estimates each producer would need between 10,443 plants, which it called a more conservative number, and 38,850 plants per producer to meet a purchase limit of 2 ounces per day, if not more.

Colorado, which limits patients to 2 ounces of medical cannabis per day, has some 363,000 plants to serve a population of 85,000 cardholders, Rodriguez said.

“Even trying to match their less generous program, we have to have somewhere greater than 400,000 plants,” he said. “Right now, we sit at less than 50,000.”