Leaf Brief

Leaf Brief: Greener Pastures

Cannabis Control Division’s first director resigns; New Mexico, nation adapting to new cannabis market

New Mexico’s cannabis landscape shifted last week, when the Cannabis Control Division’s first director, Kristen Thomson, announced her resignation—effective immediately—less than eight months after taking the helm. The Regulation and Licensing Department didn’t offer a reason for Thomson’s departure, but Superintendent Linda Trujillo appointed Carolina Barrera, who previously served as the division’s deputy director of business operations, as the interim director. Trujillo plans to work closely with Barrera “and a dedicated team who is fully committed to working with this new business industry,” the RLD tells SFR in an email.

Meanwhile, more entrepreneurs are jumping into the weed market, which some researchers believe could reach a value of $40 billion by 2030 in the US. The potential for lucrative gains has investors challenging old laws, lawmakers pouncing on federal enforcement initiatives and states eyeing easier methods for conducting financial transactions. The Department of Justice is taking another look at Obama-era guidance to federal prosecutors to practice discretion, essentially urging them to leave cannabis cases alone, in states where the plant is legal. Obama administration officials spelled out that posture in the so-called Cole Memorandum, which Trump’s first attorney general, Jeff Sessions, abandoned. Sessions told US attorneys to decide for themselves which situations call for prosecution. Still, current US Attorney General Merrick Garland has signaled the DOJ won’t be pursuing cannabis cases because it is not an efficient use of government resources. That’s a good sign for producers and users, as it appears the nation may be edging closer to laxer laws with the finish line being full federal legalization.

Scroll down for more news from around the state and nation.

By the numbers

Recreational and medical cannabis sales in New Mexico totaled a combined $38.5 million in May, marking a decrease from April of about $1 million. In the first month of adult use, Santa Fe had the state’s third-highest sales with $3.4 million. The city moved up to second place last month, coming in with $3.3 million. Now-departed Cannabis Control Division Director Kristen Thomson says the “figures depict a steady pace that we expected when adult-use cannabis was legalized.” Meanwhile, the Taxation and Revenue Department announced at the end of May that cannabis retail stores paid $2.4 million in the cannabis excise tax from the first month of recreational sales. Those retailers also paid $1.6 million in gross receipts tax.

New shop in town

Santa Fe added a dispensary to its lineup at the end of May, with newcomer Endo opening up shop at 2903 Agua Fria St. The company takes its name from 1990s hip-hop culture, offering a nod to songs that have helped normalize cannabis. (It’s a slang term for marijuana grown indoors.) Customers will often hear music playing in the store for this reason. Users who visit Endo will find the works: flower, extract, vapes, topicals and edibles. The dispensary also accepts all major debit cards with no fees and no cash back—one of the few shops in the state to use a PIN debit system so Endo can charge customers exactly what orders cost. Endo is open 10 am to 8 pm, Tuesday through Saturday; and 10 am to 6 pm on Sundays.

Congress pushing for protections

A group of US House reps are calling on the House Appropriations Committee to include language in the Commerce, Justice, Science and Related Agencies appropriations bill that would protect states that legalize cannabis from prosecution by the Department of Justice. This is the group’s second year in a row seeking safeguards. US Rep. Teresa Leger Fernandez, D-NM, is among the measure’s signers. The crux of the request is to block the Justice Department from using federal funds to prevent states and Native tribes from enacting their own cannabis laws. The request could shield tribes like the pueblos of Picuris and Pojoaque, which signed agreements earlier this year with Gov. Michelle Lujan Grisham so they could enter the industry, from intervention by the federal government.

Local leaders attend banking symposium

As the US legal cannabis industry is expected to top $33 billion in 2022, the demand for banking services has increased. So New Mexico Regulation and Licensing Department Superintendent Linda Trujillo and Financial Institutions Division Director Mark Sadowski attended the 2022 Cannabis Banking Symposium in Denver last week. The pair heard updates on the status of cannabis banking, insurance and data analytics plus compliance considerations. It’s part of an initiative to provide credit unions with information on how they can accept business from cannabis companies, despite cannabis still being federally illegal. Trujillo says it’s important that institutions interested in the possibilities of banking cannabis-related businesses to have the information “so that it’s a win-win for the credit unions and cannabis industry in New Mexico.” The symposium comes on the heels of a request from the US Conference of Mayors for Congress to pass legislation to protect banks that work with state-legal cannabis businesses from penalties.

Legal challenge wants health insurance to pay for cannabis

Ultra Health, New Mexico’s largest cannabis producer, joined a group of medical marijuana patients on June 10 in a class-action lawsuit to force health insurance companies to foot the bill for those using cannabis to treat behavioral health conditions. The defendants in the District Court case filed in Bernalillo County are Blue Cross Blue Shield of New Mexico, Cigna Health and Life Insurance Company, True Health New Mexico, Molina Healthcare of New Mexico, Presbyterian Health Plan, Presbyterian Insurance Company and Western Sky Community Care. Citing state law passed in 2021 that prevent insurance companies from imposing cost sharing for behavioral health services, the plaintiffs—including independent state Sen. Jacob Candelaria of Albuquerque—say qualified patients should no longer face out-of-pocket costs. They also point to past judicial decisions recognizing that medical cannabis obtained from a licensed cannabis provider is the “functional equivalent of a prescription” and is for gross receipts tax deductions. Ultra Health CEO Duke Rodriguez wrote in a release that the “idea of health insurance plans paying for medical cannabis may seem like an impossible dream, but all the foundation elements have already fallen into place.

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