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Yahoo
19-03-2025
- Business
- Yahoo
Cannabis industry still hoping key legislation gets to Gov. Lujan Grisham's desk
Members of New Mexico's state-regulated cannabis industry have long raised concerns about the rollout of sales for recreational use: the volume of dispensary licenses, taxes and the lack of enforcement of a still-thriving illegal market. Duke Rodriguez, CEO of New Mexico cannabis giant Ultra Health, said it was possible key legislation addressing some of these issues could land on the governor's desk before the session ends this week, but he was not particularly optimistic. "It's my understanding that nothing has crossed the finish line," Rodriguez said earlier this week. "So, while our wish list was very short, if one or three of these things cross, at best, it might be a pleasant surprise." Rodriguez has seen at least one wish granted: The Senate on Tuesday approved a bill that would give police powers to the state Regulation and Licensing Department in an attempt to crack down on the illicit market; it now heads to Gov. Michelle Lujan Grisham for her signature. The police powers bill was one of two proposed cannabis-related measures that have gained traction as the end of the session comes into focus. Another deals with intoxicating hemp. Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, believes this is the most significant session for the industry since 2022, when the state legalized recreational cannabis. The so-called "cannabis cops" bill and the legislation dealing with delta-8 THC have the potential to reshape the state's billion-dollar cannabis industry. It remains unclear, however, whether a bill that would do away with a planned escalation in cannabis excise taxes, championed by members of the industry, is going to become wrapped into the Legislature's tax package for the session. "I'm mixed on the session overall. I think there were some missed opportunities," said Matt Kennicott, who leads a group called The Plug, which supports small cannabis businesses in New Mexico. Enforcement bureau House Bill 10, which is co-sponsored by House Speaker Javier Martínez, D-Albuquerque, and already has Lujan Grisham's backing, has been one of the closely watched cannabis bills. It would allow the Regulation and Licensing Department, which houses the Cannabis Control Division, to employ certified law enforcement agents in a new enforcement bureau, primarily to investigate potential violations of the state's cannabis law. The agents would be granted the same powers as other law enforcement officers in New Mexico. Under HB 10, the enforcement bureau would have the ability to seize illegal weed and make arrests. The Regulation and Licensing Department currently has no authority to conduct criminal investigations; that is up to law enforcement. The measure passed the Senate 25-1 on Tuesday after receiving similarly wide support in the House. The Cannabis Chamber of Commerce, with a membership of about 200 license-holders, strongly supports the bill. Retailers say the underground market continues to have a negative impact on New Mexico's licensed manufacturers and distributors. Kennicott said The Plug is neutral on the measure, noting law enforcement already has the authority to regulate the illegal trade. "I would argue that that authority and that ability is still there," Kennicott said. "I am not sure why we even need House Bill 10. But what I'm hoping is that, if it does pass, implementation goes smoothly and, as an industry, we're able to have some input on the implementation of that legislation." Rodriguez said HB 10 was the lowest of his priorities. Intoxicating hemp The largely unregulated market for hemp products containing the psychoactive chemical THC has fueled concerns in New Mexico and across the nation. Products such as gummies and other edibles containing the often synthetic hemp-derived THC are sold legally in gas stations and smoke shops in many states, including New Mexico, thanks to a federal farm bill loophole. House Bill 346 — introduced by Andrea Romero, D-Santa Fe, and Derrick Lente, D-Sandia Pueblo — would impose a prohibition on synthetic cannabinoids and semisynthetic cannabinoids by banning possession, marketing and sales of delta-8, delta-10 and THC-O acetate in New Mexico. Intoxicating hemp derivatives known as delta-8 THC and delta-10 THC have become popular, Politico reported this year, with some hemp companies finding it is possible to get enough delta-9 THC in a beverage or edible product to have psychoactive effects without breaking the guidelines of a 2018 law. HB 346 passed the House on a 54-7 vote March 13 and is awaiting a hearing in the Senate Judiciary Committee. It was unclear Tuesday afternoon what bills would be heard in the committee the rest of the week, leaving uncertainty about whether HB 346 would pass the full Senate before the session comes to a close. "With just a couple days left, each day that goes by I'm less optimistic," Lewinger said. "But it does solve the issue of having intoxicating hemp-derived THC substance readily available … [without] the same testing protocols we have in the cannabis industry." HB 346 amends the Hemp Manufacturing Act to give the state Environment Department authority over hemp products. Currently, the Environment Department only regulates products manufactured in New Mexico. Environment Department spokesperson Drew Goretzka wrote in an email the agency supports the legislation. "We look forward to ensuring that finished hemp products are appropriately labeled to ensure consumers know what they are putting into their bodies," Goretzka said. "And that synthetic cannabinoid products, made using harmful chemicals and other ingredients, are not available in New Mexico." Romero said Tuesday she was not sure when the bill would get to the Senate floor but said she is "still hopeful." "Psychoactive substances that are being cultivated in the state that are at all associated with THC need to be regulated by the Cannabis Control Division. Right now, for this hemp derivative, this THC derivative that is semisynthetic or synthetic, we don't have any reliable testing to understand what's in it," Romero said. "It's completely unregulated." Halting tax hike Senate Bill 89, sponsored by Sen. Katy Duhigg, D-Albuquerque, would eliminate statutory increases in the cannabis excise tax rate, instead maintaining the current 12% cannabis excise tax "in perpetuity," according to a Legislative Finance Committee analysis. Current law provides for the cannabis excise tax to increase by 1% per year in fiscal years 2026 through 2030 for a total final rate of 18%. Duhigg's bill has not gotten a hearing during the session, but Lewinger and others were holding out hope the legislation would be rolled into a tax package. By reducing the cannabis tax rate in future years, revenues to the state general fund would be reduced by $2.7 million to $13.4 million a year, the Legislative Finance Committee notes in an analysis of Duhigg's bill. Under current law, total cannabis excise tax revenues to the general fund are estimated to climb from $32.7 million in fiscal year 2024 to $41.1 million in the fiscal year 2029, the analysis states. "I do still think that that could still go somewhere. It's just rebranded," Lewinger said. Rodriguez was less optimistic. "I'm highly doubtful any kind of cannabis tax relief is forthcoming," he said. Kennicott, who owns a company in Socorro called High Maintenance, said, "That's one that we really needed this year. And I'm not sure it's actually going to make it into the Senate's final tax package."
Yahoo
12-03-2025
- Yahoo
Marijuana Masquerade: Disguised cannabis illegally peddled at New Mexico convenience stores
NEW MEXICO (KRQE) – From the day recreational marijuana was legalized, someone was out there trying to cheat the system. That's why lawmakers imposed stringent safeguards to regulate all aspects of the new industry including licensing, lab testing, labeling requirements, and a ban on sales to children. That's the way it's supposed to work. But the reality today is a nightmare that has state officials scrambling. If you want to buy marijuana today, you don't have to go to a licensed dispensary. Visit any number of gas stations or convenience stores across New Mexico and you'll find racks of candy, chips, cokes and cannabis.'It's illegal. It's illicit. Whatever words you want to use, it's black market cannabis,' Duke Rodriguez says. Rodriguez is CEO for Ultra Health, the largest licensed cannabis producer in the state. They get away with it by disguising bootleg marijuana in packaging that falsely identifies the contents as hemp. Cannabis and hemp look alike, but chemically they are vastly different. The only way to tell the difference is by having the product tested in a laboratory. Because hemp is not psycho active and won't get you high, it can be sold anywhere including gas stations. A KRQE News 13 investigation finds New Mexico being flooded with millions of dollars worth of illicit weed masquerading as hemp. For example KRQE News 13 purchased a pre-rolled hemp cigarette called 'Permanent Marker' at the Quick Track convenience store on Wyoming. We took it to Rio Grande Analytics for lab testing. Lab Director Barry Dungan says test results show the product is 'not' properly labeled. 'That is 25% THC. It's labeled as hemp. And that is absolutely not a hemp product. That is a marijuana product,' Dungan says. If a child gets his hand on that product, 'they will absolutely get high from that,' Dungan said. The Grass Station's Smoke Shop sells a hemp labeled product called Cheech and Chong's 8-Gelato Flower. Rio Grande Analytics' lab tests show the product contains 26.5% THC which is potent, high grade marijuana in disguise. 'That is pure and simple cannabis. Disregard anything that's printed on the package. It's not accurate. They know it. It's being sold as hemp to skirt the entire system, avoid any kind of supervision, any kind of regulation,' Ultra Health's Duke Rodriguez says. Allsup's on Indian School sells a hemp labeled e-cigarette (vape) called 'SkyWalker'. Lab tests show the product contains not only marijuana but also a substantial amount of a chemical called HHC (hexahydrocannabinol). HHC is a Schedule I substance under the DEA's Controlled Substances Act. 'I am shocked to find that there. That is a Schedule I substance and the fact that it's sold in gas stations or can be bought in stores online is a huge red flag,' Rio Grande Analytics Lab Director Barry Dungan says. One industry expert estimates New Mexico's clandestine marijuana market exceeds $200,000,000 a year which includes unlicensed marijuana imposters lining the shelves of New Mexico gas stations and convenience stores. A 2022 National Institute of Justice study analyzed fifty-three random samples labeled hemp. Forty-nine of those products tested as mislabeled cannabis. In New Mexico lab tests on 18 hemp labeled products found similar results. The testing was conducted by Rio Grande Analytics. 'Of the 18 samples that we tested, only two of those turned out to be hemp products. It's alarming that all the others are just unregulated marijuana,' Lab Director Barry Dungan said.'You can call a product whatever you want, but the devil's in the details. The details say this is marijuana,' says Dan Pabon, Chief Regulatory Officer for Schwazze, a licensed cannabis business with outlets in New Mexico and Colorado. 'This product is on street corners, gas stations, convenience stores available everywhere labeled as hemp. It's actually marijuana. It's untested. It's unregulated. It's unlicensed. This stuff will get you as high, if not higher, than marijuana products that are sold in a very strict, regulated, tested environment,' Dan Pabon says.'These products are cannabis. They're being offered for sale in an unlawful manner and they are illegal,' Ultra Health's Duke Rodriguez said. 'The law is very specific on this matter. It's just that some individuals decided to be rogue (and) use packaging that implied something that wasn't true, and then straight up sold cannabis without a license,' Rodriguez says. Hemp products in New Mexico are regulated under the Hemp Manufacturing Act by the state Environment Department. Cannabis and Hemp Bureau Chief Johnathan Gerhardt says the regulatory intent of the Act is public safety. 'We also protect consumers by requiring our manufacturers to properly label products so that people are aware of what they are consuming,' Gerhardt said. However, the Hemp Bureau Chief admits he has never found marijuana improperly labeled as hemp. For example, a hemp labeled pre-rolled cigarette called Cheetch P*** is widely available at gas station convenience stores throughout Albuquerque. Lab tests by Rio Grande Analytics show Cheetah P*** contains illicit marijuana masquerading as hemp. 'One notable thing there is it also failed for multiple pesticides, which is alarming,' Lab Director Barry Dungan says. 'This is a marijuana product that has failed the state required tests (for pesticides) so it's not fit for human consumption. They're being sold in gas stations to anybody that wants them,' Dungan says. KRQE News 13 purchased a hemp labeled pre-rolled cigarette called Gorilla Glu at Big Moe's Market on Albuquerque's Westside. Lab tests show Gorilla Glu is not hemp but rather bootleg marijuana jammed with banned pesticides. 'Definitely nothing with pesticides at those levels should be ingested by anyone,' Barry Dungan said. After reviewing the laboratory analysis of Cheetah P*** and Gorilla Glu, Hemp Bureau Chief Johnathan Gerhardt agreed the faux hemp products are not safe. However, he says the Environment Department is powerless to do anything about it. Even though the Hemp Manufacturing Act is designed to protect consumers from unsafe products, Gerhardt says the Hemp Bureau lacks jurisdiction over Cheetah P***, Gorilla Glu and other marijuana products disguised as hemp. He claims, because the products were manufactured out of state, the Hemp Manufacturing Act only regulates hemp products produced in New Mexico. We asked if the Hemp Bureau has the ability to protect the public from unsafe products sold in convenience stores? Jonathon Gerhardt responded, 'Not at this time.' Gorilla Glu, Cheetah P*** and Permanent Marker are fake hemp labeled products produced by an Albuquerque business called Nuevo Cannabis. The company lists its address at a Northeast Albuquerque residence. General Partners Michael Dingess and Alfred Kalsin did not return repeated calls for comment. Following our inquiry, the Nuevo Cannabis website was taken down. Big Moe's Market, which sells Nuevo Cannabis products, did not return a phone call for comment. A representative for Quick Track convenience stores, which also carries Nuevo Cannabis products on its shelves, told KRQE News 13 he believes the hemp labeled products are legal. In New Mexico, it is a felony to manufacture, produce or sell cannabis without a license. However, don't look for New Mexico's Cannabis Control Division to start confiscating marijuana disguised as hemp in convenience stores. In a prepared statement, the Cannabis Control Division said it has 'limited enforcement over unlicensed businesses' that peddle marijuana. 'If a complaint alleges a non-CCD licensed location (is) selling hemp products the contain(s) cannabis-derived delta-9 THC, the CCD is limited to providing this information to our law enforcement and New Mexico Environment Department colleagues,' New Mexico Cannabis Control officials wrote. New Mexico is one of only a handful of states across the country that allow the sale of so called hemp products. That may change. A bill to ban the sale of hemp in New Mexico is making its way through the Roundhouse. 'We're making what was once a highly regulated, controlled industry into this open, wild, wild West experience,' Ultra Health's Duke Rodriguez says. 'The state doesn't do anything to regulate these hemp products. They're untested. They're sold illegally. And there's nothing being done about them.' Dan Pabon said. While state regulators simply look the other way, New Mexico's Attorney General has launched a criminal investigation. 'We have agents who are currently beginning the investigation of various locations and sales of these (hemp labeled) products,' New Mexico Department of Justice General Counsel Julie Meade said. 'We're investigating the false advertising and or the misrepresentations in the sale of these products,' Meade said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
