In a major crackdown on cannabis regulation compliance, New Mexico state police recently destroyed tens of thousands of pounds of cannabis plants at a facility in northwestern New Mexico. The operation, one of the largest cannabis seizures since New Mexico legalized recreational marijuana in 2021, has escalated into a legal dispute between the state and the company involved, NNK Equity LLC. The company is now vowing to sue state authorities, alleging improper conduct and violations of due process in the destruction of their crops.
Overview of the Seizure Operation
According to state authorities, the seizure took place over several days in October, with dozens of officers involved in removing and eradicating marijuana plants at NNK Equity’s facility in Waterflow, a rural area near the Navajo Nation and close to the Colorado border.
Compliance Concerns Spark Action
The New Mexico Cannabis Control Division initiated the investigation into NNK Equity earlier this year, claiming the company failed to follow several legal requirements:
- Lack of Proper License Display: NNK Equity allegedly did not post its operating licenses at the cultivation site, a basic requirement for all cannabis operators in the state.
- Unpermitted Water Usage: Regulators claimed that the company had not secured water rights for cultivation, which is a key environmental compliance factor in New Mexico.
- Insufficient Security: Authorities noted that the facility lacked camera surveillance in key areas, which cannabis regulations mandate to prevent theft and unauthorized access.
- Sanitation and Health Violations: State regulators also cited issues with sanitation at the site, though they did not disclose specific details.
Based on these compliance violations, the Cannabis Control Division began revocation proceedings against NNK Equity’s license, filing both a noncompliance order and a default order earlier this year.
NNK Equity’s Legal Response
Attorney Jacob Candelaria, who represents NNK Equity, has pushed back strongly against the state’s actions. Candelaria argues that regulators failed to follow proper legal procedures, resulting in an unjust seizure and destruction of his clients’ property. NNK Equity now plans to file lawsuits against state authorities, with several core arguments underpinning their legal stance:
- Due Process Violations: Candelaria claims that the Cannabis Control Division did not properly serve notice of its intent to revoke NNK Equity’s license, thereby denying the company the opportunity for a hearing.
- Language Barrier Issues: The company’s owners, Irving Lin and Bao Xue, are native Mandarin speakers with limited English proficiency. Lin reportedly requested a Chinese translation of key documents, but regulators allegedly did not respond to this request, raising concerns about language discrimination.
- Right to a Hearing: NNK Equity’s legal team asserts that the state denied their request for a hearing, which they argue is a violation of the company’s right to defend its compliance practices before regulatory actions were enforced.
Alleged Property Destruction Without Sufficient Notice
Candelaria has condemned the state’s decision to destroy the crops without a full legal review, calling it a violation of constitutional rights. He argues that the destruction was based on a temporary restraining order issued without adequate notice, depriving the company of a fair chance to dispute the accusations before its property was removed.
“The idea that law enforcement officers can destroy public property based upon a temporary restraining order — which can be entered without notice to all parties and before a hearing on the evidence — which was the case here, should concern all of us who believe in the Constitution,” Candelaria said in a statement.
NNK Equity’s lawsuit is expected to seek damages for the destruction of what Candelaria estimates to be hundreds of thousands of dollars worth of cannabis plants.
New Mexico’s Regulatory Stance on Cannabis Operations
The incident marks a significant enforcement move by the Cannabis Control Division, which has shown an increasing commitment to monitoring compliance within New Mexico’s rapidly growing cannabis industry. The state’s regulatory framework includes strict requirements on cultivation limits, tracking, security, and environmental practices.
Tracking Violations and Additional Licensing Infractions
State officials claim that NNK Equity exceeded its allowed plant count and attempted to cultivate plants at an unlicensed location. Further violations reportedly included failures in transportation and tracking, such as neglecting to assign unique identification numbers to each plant — a standard practice meant to ensure cannabis products are accounted for from seed to sale.
According to the Cannabis Control Division, the investigation initially started with a compliance check in June. State police were called in to assist, resulting in a large-scale investigation led by the New Mexico State Police Special Investigations Unit.
Previous Cannabis Regulatory Actions in the Region
This latest enforcement action is part of a broader trend in northwestern New Mexico, where regulators have recently taken action against other cannabis operations. Earlier this year, state regulators cracked down on two additional cannabis businesses in the same region, prompting the Navajo Nation to file separate charges against two tribal members.
The Path Forward for NNK Equity
NNK Equity’s attorneys are expected to request that a state district judge overturn the revocation order and compel regulators to hold a formal hearing on the company’s compliance practices. The case could set a precedent in New Mexico, testing the extent of state authority over cannabis licensing and enforcement practices, especially concerning non-English-speaking operators who may require accommodations.
As the cannabis industry continues to evolve in New Mexico, legal battles like this could shape the regulatory landscape, determining how far state authorities can go in enforcing compliance and what due process cannabis operators are entitled to under state law.
