New Mexico Gov. Lujan Grisham Legalizes Adult-Use Cannabis

NEW MEXICO: Gov. Michelle Lujan Grisham on Monday formally enacted adult-use cannabis legalization in the state of New Mexico, signing into law an historic measure approved by the state Legislature after the governor called them into a special session for that purpose late last month.

“The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” said Gov. Lujan Grisham. “We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed war on drugs. And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better.”

New jobs, new revenue

The sales of adult-use recreational cannabis could amount to $318 million in the first year, creating over several years what could be more than 11,000 new jobs, according Dr. Kelly O’Donnell, independent economist and public finance expert. Preliminary estimates are that the excise tax will raise at least $20 million for the general fund in the first full fiscal year, with significant growth in subsequent years. Local governments will also benefit from the added revenue.

“As we look to rebound from the economic downturn caused by the pandemic, entrepreneurs will benefit from this great opportunity to create lucrative new enterprises, the state and local governments will benefit from the added revenue and, importantly, workers will benefit from the chance to land new types of jobs and build careers,” said Gov. Lujan Grisham.

“Today, New Mexico seized a once-in-a-lifetime opportunity to establish a multi-million industry with a framework that’s right for our state and will benefit New Mexicans for generations to come,” said Rep. Javier Martínez. “Not only are we launching a burgeoning industry that will strengthen our economy, create jobs and generate tax dollars, but we are doing so in an equitable way that will curb the illicit market and undo some damage of the failed war on drugs.”

A well regulated industry spurs economic activity, creates revenue for state and local government and protects the public

The governor’s signature today launches an administrative process that will culminate in the launch of commercial sales for adults no later than April 1, 2022. The issuance of licenses to conduct commercial cannabis activity will begin no later than Jan. 1, 2022.

“This is a major new program for the state that will have a positive impact on job growth and the economy, but it does require smart regulation in order to protect the public and entrepreneurs seeking to get into the business,” said Sen. Katy Duhigg. “I’m proud of the work we did to ensure that we are creating a fair and equitable program that has a low barrier to entry. At the same time, proper regulation and oversight will keep our successful medical cannabis program intact and help new businesses grow while keeping consumers safe.”

Gross receipts tax and local taxes apply to the value of the adult-use purchase.

“This is the right model for New Mexico because it creates a local, sustainable and regulated industry while at the same time protecting what’s near and dear to all us, including public health, road safety and the well-being of our youth,” said Superintendent Linda M. Trujillo of the state Regulation and Licensing Department, which will oversee and manage the new industry.

New Mexico becomes the latest state in the U.S. to legalize adult-use cannabis, and is only the fifth state to enact it through its state Legislature.

“The standardization and statewide regulation that comes with a bona fide industry will protect consumers,” said Trujillo. “In addition, local jurisdictions will be able to enact reasonable zoning, land use and other business requirements.”

Protecting public safety, health, consumers and N.M. youth

The legislation creates a Public Health Advisory Board to monitor cannabis use and data pertaining to the health effects of legalizing cannabis. In addition, the Department of Health is required to provide annual reports, including information on youth access, driving and road safety, workplace safety, consumer and product safety and emergency room visits involving cannabis.

“Protections for our children are an essential part of this plan and include strict restrictions of packaging, labeling and advertising, as well as stiff penalties for anyone selling cannabis to persons younger than 21,” said Sen. Linda Lopez.

The legislation was sponsored by Rep. Javier Martinez, Rep. Andrea Romero, Rep. Debbie Armstrong, Sen. Linda Lopez and Sen. Katy Duhigg.

“The legalization of cannabis is ultimately a public health measure. When we regulate the industry, we can control the product quality, protect consumers, and bring down the dangerous illicit market in our state,” said Rep. Debbie Armstrong. “This law includes dozens of necessary safeguards to protect our youth, ensure adequate supply for the medical program, and will bring in additional funds for programs, services, and research to support the health and wellbeing of New Mexicans.”

Expungement of convictions

Surrounded by legislative sponsors and advocates outside the state Capitol, Gov. Lujan Grisham, who has advocated for legalization since taking office, signed legislation that will authorize the expungement old low-level cannabis convictions from the record of what is expected to be tens of thousands of New Mexicans and make possible the potential early release of low-level convicted cannabis offenders who are currently incarcerated.

“Thousands of people, and a disproportionate number of them from communities of color, have been wronged by this country’s failed war on drugs,” said Sen. Jerry Ortiz y Pino. “We will all benefit from our state’s smart, fair and equitable new approach to past low-level convictions.”

“For decades, our communities of color have been discriminated against for minor cannabis offenses, so we must ensure that those who would not be arrested today do not continue to be incarcerated or held back by criminal records for acts that are no longer crimes,” said Rep. Andrea Romero. “By ensuring equity and social justice in our cannabis legalization, we are saying ‘enough’ to the devastating ‘War on Drugs’ that over-incarcerated and over-penalized thousands of New Mexicans.”

This important social justice measure was sponsored by Sen. Lopez, Sen. Duhigg, Rep. Martinez, Rep. Romero and Sen. Jerry Ortiz y Pino.

“The signing of the cannabis legalization and expungement package will ensure equitable opportunities for farmers and other small businesses, and long overdue justice – including automatic expungement – for those with past cannabis arrests or convictions,” said Emily Kaltenbach, Senior Director, Resident States and New Mexico, Drug Policy Alliance. “We thank the Governor and our legislative allies for not taking ‘no’ for an answer and stopping at nothing until we were able to get justice for New Mexico communities – particularly Hispanic/Latinx, Black, Native and Indigenous – that have been immensely harmed by cannabis prohibition.”

***

“This legislation is a major, major step forward for our state,” said Gov. Lujan Grisham. “Legalized adult-use cannabis is going to change the way we think about New Mexico for the better – our workforce, our economy, our future. We’re ready to break new ground. We’re ready to invest in ourselves and the limitless potential of New Mexicans. And we’re ready to get to work in making this industry a successful one.”

The governor’s signature on the final bills to have reached her desk from the special session caps an incredibly productive spring 2021 legislative season, during which the Legislature and governor delivered a series of significant policy achievements, including many that were either campaign promises and/or longstanding priorities of the governor.

On top of the passage of a constitutional amendment ballot measure that would authorize an additional portion of the state’s Land Grant Permanent Fund for early childhood education, and in addition to long-sought social welfare measures, the Legislature authorized and governor enacted almost $1 billion in direct pandemic relief for individuals and businesses across the state, including $200 million in small business grants, $500 million in small business loans, a tax holiday for hospitality businesses and restaurants, a $600 tax rebate for working families and a sweeping tax overhaul that will amount to a significantly boosted tax rebate for tens of thousands of New Mexico middle-class families.

The Hemp Industry: Where Are We Going? 

By Steven Gluckstern
Chair and CEO, Santa Fe Farms

It’s difficult to predict where the hemp industry will go over the next five years and how it will develop as it is only been just over 22 months since the farm bill of 2018 was passed legalizing hemp for transport across state lines. This legislation opened up an entire new industry for CBD and other hemp related products. What we do know, is that hemp is an extraordinary plant and the industry, although nascent, will have a profound impact both economically and environmentally in both the US and abroad.

What we learned in the first two years of the legalized hemp industry is now that everyone rushed into cultivation, farming may not be the most profitable sector. The primary lesson learned for most people is that when you partner with Mother Nature, she is fickle and almost always wins. Furthermore, unlike corn, soy, and other US agricultural products, the plant needs to go through a transformational process to make it usable for downstream products. Thought of as the narrow center of the hourglass or “chokepoint” of the industry, the plant needs to be processed and/or extracted to be usable for anything other than smokable flower.

While much of the industry is now focused on CBD and other phyto-cannabinoid products (the base of the hourglass), our vision at Santa Fe Farms is much broader and includes not only cultivation, and processing, but industrial hemp for building materials, plastics, paper, and other manufactured goods as well as our own phyto-cannabinoid products. Additionally, we are discovering that carbon-based derivatives obtained through pyrolysis will drive further business in ways we are just beginning to understand and that could have significant impact on both renewable energy and environmental sustainability.

We also believe there is significant opportunity for technology; because this is a nascent industry, the visibility of the hemp supply chain is almost nonexistent. Studying the data is almost impossible but as advanced technologies such as blockchain become “mainstream”, we will soon see efficiencies in cultivation, harvesting, processing, and innovation. We have always thought there was significant opportunity for software as it relates to the hemp supply chain, and with experienced partners have begun investing significant resources to create an industry agnostic “Supply Chain as a Service” platform.

When we started at Santa Fe Farms, we initially thought only about cultivation, but quickly realized that one should make multiple bets to maximize profit one likely had to allocate capital to all parts of the business from seed genetics to retail sale. In the short-term, we believe that prices will stabilize, people will leave the industry (by choice and necessity) and that prices will rise as demand increases.

More interesting however is looking out ten years. As we face the “hemp future,” there is a tremendous lack of visibility of regulation. We can hopefully drive regulation from within by creating products and SOPs that adhere to high quality standards. No one knows what future regulation will look like as it is clearly, at best, a work in progress. However, it represents a place where we can come together as an industry to create policy change, social justice and educational platforms.

Helix Technologies Launches Nation’s First Online MMJ Reciprocity Platform In New Mexico

COLORADO:  Helix Technologies, announced today that New Mexico’s online medical marijuana reciprocity portal is live and has been serving out of state patients living or vacationing in New Mexico for almost a month as of this writing.

The system, which is the first of its kind for US medical cannabis programs, allows state regulators to electronically register and track out of state patients into the patient registry. The system decreases time and costs associated with paper only patient registries and allows the state to track and enforce dispensing limits in real time to prevent potential diversion to the black market.

The new platform benefits all stakeholders in the New Mexico industry as it allows out of state patients a convenient way to access medical cannabis while enjoying the many outdoor and cultural opportunities in New Mexico. Since going live with the reciprocity module on July 1st, more than 1,700 out of state patients have been registered for the program. “We’re encouraged by the ability of this platform to assure people visiting New Mexico get the medicine they need when cannabis has been recommended as a treatment by their medical provider at home,” said New Mexico Department of Health Medical Cannabis Program Director Dr. Dominick Zurlo. “We appreciate the efforts of Helix Biotrack to work with us toward the goal of assuring visiting patients experience uninterrupted treatment and relief for their medical conditions.”

“We are always looking for ways to work with our Government partners to improve transparency, ease of use, and ultimately public safety,” said Helix Biotrack COO Dr. Moe Afaneh. “This is the first step towards digitally bridging states’ medical markets, while ultimately improving access for patients looking to explore New Mexico, bringing in new patients for the industry, and saving everyone time and money in the process. We’re very proud to bring another industry-first innovation to Seed to Sale Tracking, with more to come.”

New Mexico Medical Cannabis Program Continues Growth In Third Quarter

Supply remains in jeopardy as patient enrollment increases at double the rate of industry sales

NEW MEXICO:The 35 licensed commercial producers in New Mexico’s Medical Cannabis Program brought in a record $22.1 million for the third quarter of 2017, an increase of 4 percent from the second quarter.

Patient enrollment increased by over 10 percent, from 44,403 to 48,861, during the same quarterly period.

“Revenue is growing slower than previous quarters and not keeping pace with the dramatic increase of patients enrolled, which is a result of the lowest number of plants per patient in the history of the program,” said Duke Rodriguez, CEO and President of Ultra Health. “This product and pricing pressure is likely pushing qualified patients to purchase unsafe medicine from the illegal black market.”

All providers licensed a total of 14,550 plants for the 2017-2018 period, leaving less than one third of a single plant per patient. The plant count ratio will continue to deteriorate each month as patient enrollment increases.

The New Mexico medical cannabis industry is on course to complete 2017 with total projected sales of $85.5 million, which is a 68 percent increase over the $50.6 million achieved in 2016. Patient enrollment is projected to increase by 86 percent from 29,046 patients on January 1, 2017 to 54,091 patients on January 1, 2018.

Third Quarter Breakdown

Ultra Health continues to lead all providers in the third quarter with $2.8 million in sales, an increase of 20 percent since June 30, 2017. The provider currently holds 13 percent of the New Mexico medical cannabis market. Ultra Health currently leads the nation in percentage market share penetration.

The provider attributes its growth in the third quarter to patients’ favorable response to its new pharmaceutical-grade, smokeless medicinal productswhich include sublingual and oral tablets, pastilles, vaginal and rectal suppositories, oils, topicals and patches.

The 23 original providers accounted for 79 percent of the total market share for the third quarter while the 12 newest providers, which were selected in October 2015, held 21 percent altogether.

Ultra Health opened its ninth dispensary location in Silver City on October 17, 2017. The provider now serves seven counties as the nation’s largest vertically integrated medical-only cannabis network.

Six of the 35 licensed producers currently operate without a single retail dispensary location.

Ultra Health Opens Eighth Location, Now In Six N.M. Counties

NEW MEXICO: Ultra Health has announced plans to  officially open its eighth location in Alamogordo, N.M., on Tuesday, August 29th, making the company the largest vertically integrated, seed-to-sale medical cannabis network in the country.

The opening comes after a long-awaited inspection from the New Mexico Department of Health (NMDOH). Ultra Health initially submitted its amendment to open a dispensary in Alamogordo in May of 2016. There are currently more than 45,000 enrollees in the state’s medical cannabis program.

The new Alamogordo dispensary will bring the provider to eight locations serving six counties in New Mexico, more than any other medical cannabis provider in the state. Ultra Health ranks #1 by number of locations in the U.S. among the 21 states that operate medical-only cannabis programs (an additional 8 states have complete legalization for adults).

“Under the Lynn and Erin Compassionate Use Act, licensed producers are exclusively granted the authority to produce, possess, distribute and dispense cannabis,” said Duke Rodriguez, CEO and President of Ultra Health®. “We are committed to fully exercising these rights to improve the quality of life of the patients we serve. Ultra Health is proud to be actively establishing the highest quality, most accessible and affordable medical cannabis system in the United States.”

Ultra Health plans to increase patient choice and access by continuing to establish new dispensaries in underserved communities including Silver City, Espanola, Los Ranchos, Deming, Sunland Park, Las Vegas, Raton, Tucumcari, Artesia, Gallup, Farmington, Grants, Socorro, Truth or Consequences, Portales, Roswell, Los Alamos, Moriarty, Lovington, and the unincorporated South Valley of Albuquerque.

There are currently 15 New Mexico counties and thousands of medical cannabis patients without access to a full time dispensary. While approval for medical cannabis dispensaries in the rural areas has lagged, the Albuquerque market appears saturated with dispensaries.

As of August 4, there were 25 dispensary locations in Albuquerque serving a patient population of 13,812 enrollees in Bernalillo County. The Albuquerque dispensary density is higher than that of Tucson, Arizona, which has 10 dispensaries serving 18,766 patient enrollees in its respective Pima County. The U.S. Census Bureau (2016) estimates the Albuquerque and Tucson city populations at 559,279 and 530,706 respectively.

Medical Cannabis and Reduced Prescription Use

NEW MEXICO: In a soon-to-be published article in the *Journal of the American Medical Directors Association, *University of New Mexico researchers, in

collaboration with Industrial Rehabilitation Clinics of Albuquerque, followed patients who enrolled voluntarily in the New Mexico state medical cannabis program and found that they significantly reduced their utilization of scheduled prescription medications in the months following enrollment. All prescriptions for scheduled medications must be reported to the New Mexico Prescription Monitoring Program with opiates and benzodiazepines being the two most common. Based on these prescription records, patients enrolled in the medical cannabis program reduced the monthly average number of prescriptions, types of prescriptions (drug classes), number of prescribers, and number of related pharmacy visits. 71% of medical cannabis program enrollees either ceased or reduced their use of scheduled prescriptions within 6 months of enrolling

While other studies on medical cannabis have looked at similar state-level outcomes, this study is the first to take the approach of examining individual patients throughout their enrollment in the medical cannabis program and comparing those patients to a comparison group of similar patients who did not enroll in the medical cannabis program.

The findings of this study indicate that once a patient enrolls in the medical cannabis program there is an increased likelihood that the patient will decrease their usage of scheduled medications. These medications include many drugs of abuse such as opiates, benzodiazepines, and sleeping medications. Opiates in particular are in the public discourse because of the danger of overdose, addiction and death.

New Mexico Medical Cannabis Sales Exceed $50.6 Million In 2016

NEW MEXICO: The Medical Cannabis Program’s total industry revenues from 2015 to 2016 increased by $19.7 million, resulting in $50,638,520 and a growth of 64 percent. Cannabis sales significantly surpassed other notable industries. Comparatively, the New Mexico chile crop was valued at $41.1 million in 2015 and the state’s craft beer industry is expected to generate $30 million in 2016.

The last reported New Mexico Department of Health (NMDOH) active patient enrollees was 32,840 as of October 2016, an increase of 76 percent from the prior year at 18,628. The growth in total dollar sales continues to lag behind patient enrollee count, validating an underserved demand attributable to the lack of adequate supply in the marketplace. Enrollee information for November and December 2016 has not been released by NMDOH.

The average price per gram in 2016 was $11.28 per gram and the median price was $10.94 per gram. Total grams sold in New Mexico for 2016 was estimated at 4,628,749 grams or 10,205 pounds of cannabis sold. The last reported demand estimates released by NMDOH in 2013 indicated “supply would need to be approximately 5,110,726.4 grams per year,” to meet the needs of  9,760 patients. Based upon NMDOH data, the most recent patient numbers of 32,840 patients would justify a need of over 17.2 million grams or 37,877 pounds annually.

The top five producers accounted for 43 percent of the total sales in New Mexico. On December 31, 2016 the total cannabis flower inventory on hand for the top five producers was 94,929 grams or 209 pounds. Based upon the top five producers’ 2016 sales experience, the inventory on hand represents a supply of less than 15.4 days or approximately a two week supply. Adequate supply is mandated by law “to ensure the uninterrupted availability of cannabis for a period of three months.”

N.M. Medical Cannabis Program Grows To 31,000 Patients

NEW MEXICO: The number of patients in New Mexico’s medical cannabis program reached 30,877 at the end of the third quarter, an increase of more than 4300 since June 30, 2016.  This increase is twice the amount of patients that were added to the program in the same quarter in 2015.  Additionally the program has seen a 76 percent patient growth increase over the past year.

Bernalillo and Santa Fe remain the two largest counties by patient population with 11,396 and 4,070 enrolled patients respectively. Every county¨ excluding Harding and Union counties experienced a double-digit increase in patients in the third calendar quarter. Growth continues to accelerate particularly in the southern and southeastern parts of New Mexico including Dona Ana, Lea, Chaves, Grant, and Eddy counties. Nearly 3,200 patients are living in rural counties without a full-time dispensary.

N.M. Medial Cannabis Program Surpasses 30,000 Patients

The Medical Cannabis Program reaches all-time high patient numbers in August

NEW MEXICO: The number of patients in the New Mexico Medical Cannabis Program reached 30,140 this month, including 975 pending applications, according to a document released by the New Mexico Department of Health (NMDOH) Monday at a legislative meeting in Taos.

NMDOH confirmed in a written statement that zero new patient applications or renewals have been denied during fiscal year 2016. There are currently 6,300 patients with Personal Production Licenses (PPLs), and zero PPL applications have been denied.

“We are pleased to confirm that we are above 30,000 patients and to acknowledge the reality that 100 percent of all applications are approved,” said Duke Rodriguez, CEO and President of Ultra Health. “It would be wise to immediately adopt a policy of presumptive eligibility thereby making certain there are no further delays in getting patients their rights to access medical cannabis.”

NMDOH stated that due to an increase in the number of patients in the program, there is an increased demand for medical cannabis in New Mexico.

In the first 50 days of the new fiscal year, the program has already grown by 2,300 patients, and NMDOH expects continued growth in 2017. Nearly 950 new applications are submitted to NMDOH each month. At an annualized rate, the Medical Cannabis Program is currently growing by more than 80 percent each year.

It is estimated that by the end of this fiscal year, the program will grow to 43,400 patients. This number is 2 percent of the New Mexico population. This is comparable to current Colorado and Arizona penetration rates of 2 percent and 1.5 percent, respectively. “Growth does not occur by chance,” Rodriguez said. “Continued growth will only come from the cannabis industry improving access, affordability and product choice.”

New Mexico Cannabis Producers Pay $2.76 Million By Deadline

NEW MEXICO:  The 35 Licensed NonProfit Producers (LNPPs) of New Mexico’s fully patient funded and self supporting Medical Cannabis Program paid $2.76 million in fees to the New Mexico Department of Health (NMDOH) Monday, according to a report released from the NMDOH.

The fees were for a total of 13,800 plants, which serve the state’s 26,568 medical cannabis patients as of June 30, 2016. The current ratio of plants per patient is one half of a plant per patient in New Mexico, while other states such as Colorado approve 6 plants per patient for medical cannabis producers, according to the Colorado Department of Revenue’s 2015 annual Update. On average, 300,000 to 320,000 medical cannabis plants were cultivated each month in Colorado.

New Mexico has the highest per plant fee in the United States, as well as the most restrictive plant count. LNPPs are each allowed a maximum of 450 plants, which total to $90,000 in fees annually per producer. Other states such as Arizona and Nevada do not have plant count limitations and have a fee as low as $1,000 per year per producer.

As more patients enter New Mexico’s Medical Cannabis Program, which has increased by 74 percent from June 30, 2015 to June 30, 2016, the ratio of plants per patient will dramatically further decrease unless plant count restrictions are loosened or eliminated completely.

“The Medical Cannabis Program is fully self sufficient, as it receives funding solely from patients,” said Duke Rodriguez, CEO and President of Ultra Health. “Medical cannabis patients in New Mexico deserve to reap the maximum benefits of this program, and the current plant count limitations issued by the New Mexico Department of Health is keeping them from fully benefitting from an adequate supply of their medicine.”

Along with the Medical Cannabis Program being fully funded by patients, the NMDOH reverted monies from the program fees back into the general fund in 2015, which could have been reinvested into the program to support its exponential growth.

Of the current 35 LNPPs in New Mexico, nearly three quarters of producers are buying the maximum of 450 plants. Of the remaining 10 LNPPs, they purchased between 200 and 300 plants. This data demonstrates that the majority of the industry is securing the nearly maximum number of allowed plants, but will still fall substantially below the expected demand.