The decision to exhibit a live cannabis plant at the State Fair earned New Mexico's top-selling medical cannabis provider a hefty punishment from the Department of Health.
State officials ordered Ultra Health to suspend sales at all six of its dispensaries in New Mexico for five consecutive days and pay a $100 fine as punishment for displaying a single seedling at the New Mexico State Fair in early September.
Kenny Vigil, the director of New Mexico's Medical Cannabis Program, issued the disciplinary action eight days after fair officials asked the firm to remove a 21-day old nonflowering marijuana plant from their preapproved visitor's booth.
State Fair officials admit they overlooked a plan Ultra Health submitted describing their intention to display the plant to educate the public about medical cannabis before they signed an exhibit contract, which specifically prohibits displaying drug related merchandise or paraphernalia, with the firm.
Public records show that on the first day of the event, Larry C Trujillo, a director of fair security, and New Mexico State Police Lieutenant David Ben Romero checked with then-medical cannabis program compliance manager Ken Groggel. He determined that Ultra Health violated a program rule that prohibits cannabis production to be in view of the public when it moved the plant from its greenhouse to the fairgrounds.
"The removal of a cannabis plant to an off-site location constituted both a change of location for the non-profit producer's production and a substantial change to the entity's production plan," new program manager Kenny Vigil wrote in a Sept. 16 letter to Leigh Jenke, the president of the grower's nonprofit organization.
Jenke insists that Ultra Health never intended for the booth display to be considered a new or alternative production facility and that the plant was "secured, guarded and controlled by our licensed personnel at all times." In her October 12 response letter, Jenke writes that Ultra Health "acted in good faith with full disclosure," adding that the company received a full refund from fair administrators. Jenke's letter also reveals that Vigil never contacted the company to ask questions or inquire about the booth's preapproved status before handing out the disciplinary action.
That upsets Jenke. She says the proposed punishment is inconsistent with any sanctions ever imposed by the Medical Cannabis Program.
In fact, documents obtained through a public records request show that other growers caught violating program rules have simply had to provide the regulators formal corrective action plans.
New MexiCann Natural Medicine, a Santa Fe dispensary, however, did receive a $13,000 fine from OSHA following a gas explosion that seriously injured two employees, but no monetary sanction from the health department and was prohibited from using gas extraction methods to manufacture cannabis products for 12 months.
Duke Rodriguez, the president of the Ultra Health's shared management company, tells SFR he thinks the unprecedented punishment is retaliation for a lawsuit the company jointly filed in August with Nicole Sena, the mother of an infant patient, challenging the department's 450-plant cap limitation. Rodriguez says the seedling taken to the fair from a greenhouse in Bernalillo amounted to less than one percent of the company's 450-plant total.
"There is no way that this constituted a substantial change to Ultra Health's production or distribution plans," says Rodriguez. "The Department of Health has run roughshod over the cannabis program with rules detrimental to patient care, delaying cards, excessive taxes and fees, low plant counts, historical and continuous adequate supply issues and now threatened sanctions."
If the department's sanction sticks it could cost the provider substantially more than a $100 fine. Rodriguez estimates Ultra Health stands to lose around $100,000 in total sales by shutting down all six of its New Mexico dispensaries for nearly a week. The long-term impact could be even bigger as loyal customers seek alternative providers during the shutdown.
Roger Posey, a Hobbs resident, who uses cannabis to treat his post-traumatic stress disorder, tells SFR via a telephone interview that if Ultra Health is forced to shutter its dispensary he will probably turn to street dealers.
“I need the medical grade we get here at Ultra Health. On the street, you never know what people are putting into it,” says Posey, adding that driving 192 miles to the next closest dispensary in Ruidoso “is out of the question.” Another dispensary in Hobbs is only open a few hours a day.
Health department spokesman Paul Rhien contends “patients will not lose access to medicine because of this disciplinary action.”
The health department has retained Albuquerque attorney Craig Erickson to hear both sides of the issue at a closed-door meeting on Nov. 30. His recommendation is nonbinding. Instead, acting Secretary of Health Lynn Gallagher makes the final decision to uphold or deny the disciplinary action.
In the meantime, Ultra Health is planning to return to Expo New Mexico and Tingley Coliseum next spring as the title sponsor of the annual Gathering of Nations.