New Mexico’s cannabis regulators have revoked the licenses of two cannabis cultivators for breaking the state’s cannabis laws. The move comes as part of the state’s efforts to ensure compliance and safety in the newly legalized cannabis industry.
Paradise Distro Loses License for Selling Out-of-State Products
One of the cultivators that lost its license was Paradise Distro LLC, which operated a cannabis retail store in Albuquerque. The New Mexico Regulation and Licensing Department (RLD) ordered the company to cease operations on July 13, 2023, after finding that it was selling cannabis products that were not produced in New Mexico and had California markings on them.
The RLD also found that Paradise Distro was displaying products such as edibles and concentrates that were not properly documented on the required shipping manifests, and inaccurately reporting sales data, including more than $56,000 in cash and $8,338 in additional funds that were reported in the licensee’s third-party point-of-sale system but not in BioTrack, the state’s mandatory track and trace system.
The RLD said that this was the first time it had revoked a cannabis business license in the state, and that the revocation should serve as a warning to those selling or receiving out-of-state cannabis products. The RLD’s superintendent, Linda Trujillo, said that the department was holding true to the intent of the Cannabis Regulation Act and taking action upon licensees that violated the law.
“Our compliance officers are ramping up inspections and we will work to remove bad actors from within the New Mexico cannabis industry,” Trujillo said in a press release.
Sawmill Sweet Leaf Faces Injunction for Diverting Product and Manufacturing Concentrate Without Permit
The other cultivator that faced regulatory action was Sawmill Sweet Leaf LLC, which also operated in Albuquerque. The RLD filed a petition seeking a preliminary injunction against the company on August 2, 2023, alleging that it had been diverting cannabis out of state and manufacturing cannabis concentrate without a permit.
According to the RLD, Sawmill Sweet Leaf had a Cannabis Manufacturer II license, which allowed it to make edibles or topical cannabis products, but not any type of extraction. However, the RLD’s Cannabis Control Division (CCD) discovered that the company was using an unlicensed closed-loop extraction system at its facility, and that the products it was selling out of state had not been tested.
The RLD said that it was able to seek an injunction thanks to a new provision in the state’s Uniform Licensing Act, which became effective on June 19, 2023, and allowed licensing agencies to suspend licenses immediately if they posed an instant threat to the health, safety and lives of consumers.
“While the licensee in question will still receive due process through a formal hearing, we can now ensure New Mexicans are protected from dangerous products or a life-threatening explosion in the interim,” Trujillo said in a press release.
A hearing for the injunction has not yet been set.
New Mexico’s Cannabis Industry Faces Growing Pains
New Mexico legalized cannabis for adult use on April 12, 2023, when Governor Michelle Lujan Grisham signed the Cannabis Regulation Act into law. The law allows adults 21 and older to possess up to two ounces of cannabis, grow up to six plants at home, and purchase cannabis from licensed retailers. The law also established the CCD within the RLD to regulate and license the cannabis industry.
The CCD issued its first licenses to cannabis producers on September 1, 2023, and the first retail sales began on October 1, 2023. The CCD said that it had issued 114 licenses to cannabis producers, 70 licenses to cannabis manufacturers, 24 licenses to cannabis couriers, and 18 licenses to cannabis testing laboratories as of November 1, 2023.
However, the cannabis industry in New Mexico has also faced some challenges and controversies, such as product shortages, price fluctuations, lawsuits, and compliance issues. The RLD said that it was working to address these problems and ensure a safe and successful cannabis market in the state.
“We are committed to providing a fair and transparent regulatory framework for the cannabis industry, while also protecting the public health and safety of New Mexicans,” Trujillo said.
