New Mexico’s #1 Cannabis Company submits brief in monumental case that will shape cannabis policy

(Albuquerque) – Ultra Health, New Mexico’s #1 Cannabis Company, submitted an Amicus Brief to the New Mexico Supreme Court on June 18, 2021, demonstrating the legal basis for medical cannabis to be taxed exactly like any other prescription medication in the state.

The brief was submitted in support of another licensed cannabis producer’s case that is now pending before the Supreme Court. The producer requested a refund in 2014 for New Mexico gross receipts taxes paid on medical cannabis, claiming medical cannabis should be untaxed and treated like any other prescription in the state. The New Mexico Tax and Revenue Department (TRD) denied the claim, as did a Hearing Officer in an internal administrative proceeding. The cannabis producer appealed the Hearing Officer’s ruling to the New Mexico Court of Appeals.  

In January 2020, the New Mexico Court of Appeals overturned TRD’s decision to deny medical cannabis purchases a deduction from New Mexico gross receipts tax.

“To paraphrase, the Compassionate Use Act was intended to make medical [cannabis] accessible to those with debilitating medical conditions who might benefit from the use thereof,” Judge M. Monica Zomara stated in the Court of Appeals opinion. “It is reasonably self-evident that the deduction from gross receipts for prescription drugs was similarly intended to make medical treatment more accessible, by lessening the expense to those who require it. These statutes should be read harmoniously, to give effect to their commonality of purpose.” 

TRD chose to appeal the Court of Appeals’ ruling, and the case will now be heard by the New Mexico Supreme Court.  

Ultra Health’s Amicus Brief outlines several components that support the Court of Appeals ruling. The brief specifies that the processes of obtaining medical cannabis and obtaining a prescription medication are practically identical, that medical providers are legally authorized under state law to authorize the use of cannabis as medicine, and that cannabis producers are legally authorized under state law to dispense cannabis. 

“The legal structure of medical cannabis in New Mexico has never been a tossed-off, throwaway jumble. It has always been a careful, complex system that allows New Mexicans to use medical cannabis in a responsible manner,” Ultra Health’s brief states. “Recognizing the gross receipts tax deduction for medical cannabis comports with the overall medicalized, scientific paradigm of [the Lynn and Erin Compassionate Use Act].”

Furthermore, the New Mexico Legislature recently affirmed the Court of Appeals opinion by passing legislation that memorializes the tax deduction for medical cannabis, with the passage of the Cannabis Regulation Act in the 2021 Special Session in March. 

A hearing date for oral argument has not yet been set in the matter before the Supreme Court. Other interested parties may submit Amicus Briefs with the Court’s permission no later than June 23, 2020.