The state cannabis control division announced on Thursday that a marijuana retailer in Albuquerque, New Mexico, had its license revoked. The reason behind this action was the retailer's violation of state law by selling out-of-state cannabis.
According to regulators, the Paradise Exotics Distro cannabis store, located on a central shopping thoroughfare, was allegedly selling cannabis products that were imported from California and labelled with a California stamp of origin. At the time of the announcement, business representatives were unavailable for immediate contact via phone or social media.
A Stern Warning to Those Shipping Out-Of-State Cannabis Products.
New Mexico is one of the 21 states that have legalized recreational marijuana for adults. However, despite state-level legalization, a federal ban on marijuana still prohibits interstate trade or trafficking.
On the West Coast, states like Oregon, California, and Washington face a surplus of cannabis. In response to this issue, they have introduced trigger bills, which would allow for interstate cannabis trade agreements in the future if the U.S. government decides to permit it.
In New Mexico, the sale of out-of-state cannabis products is strictly prohibited. State lawmakers have expressed various concerns, including product safety and the impact on local economic development. Recently, on Thursday, there was a significant development as regulators in New Mexico revoked a cannabis business license for the first time since the commencement of legal recreational marijuana sales on April 1, 2022.
Paradise Exotics Distro faced additional allegations from regulators, as they discovered the retailer's failure to document shipping manifests adequately. Moreover, the store inaccurately reported sales data to the state's marijuana production tracking system, which monitors the entire process from seedlings to sales.
In response to these findings, Regulation and Licensing Department Superintendent Linda Trujillo issued a statement. She emphasized that the revocation of Paradise Exotics Distro's license should be a clear warning to others selling or receiving out-of-state cannabis products. To uphold compliance, Trujillo stated that the department's compliance officers are intensifying inspections and taking decisive action to remove any bad actors operating within the New Mexico cannabis industry.
Duke Rodriguez, the CEO of Ultra Health, the largest cannabis operator in New Mexico, commented on the license suspension of Paradise Exotics Distro. Rodriguez states this suspension highlights an imbalance in New Mexico's cannabis market. He urged the state to consider easing restrictions on large-scale cannabis cultivation.
Rodriguez raised a pertinent question, suggesting that people should inquire why there seems to be a necessity for cannabis products to cross state lines. He pointed out that such situations typically occur when the legal market within a state cannot meet the demand, leading to the illicit black market filling the void. By easing restrictions on large-scale cannabis cultivation, Rodriguez believes the state can address this issue and reduce the need for out-of-state product transactions.
Recreational Cannabis in New Mexico
On April 1, 2022, New Mexico took a significant step by legalizing recreational marijuana, which brought cannabis sales to the doorstep of Texas, the largest prohibition state.
However, recent attempts to further expand legalization faced a setback when voters in Oklahoma rejected a ballot measure. This measure aimed to make Oklahoma the 22nd state in the U.S. to legalize recreational marijuana.
Despite this, in New Mexico, the cannabis industry has been thriving. Marijuana entrepreneurs have established numerous retail outlets, farms, and industrial kitchens for manufacturing various cannabis products, including edible candies. Currently, there are 633 registered cannabis retailers spread across the state, catering to its population of 2.1 million residents.
In the last 12 months, the state has generated more than $27 million in excise taxes from sales of recreational cannabis. Local governments also receive a percentage of this revenue through the state's 12% excise tax on recreational marijuana sales. The provincial government also received a share of additional sales taxes applicable to cannabis purchases.
Notably, cannabis retailers and dispensaries near Texas have contributed significantly to the overall sales figures. On the outskirts of El Paso, Texas' Sunland Park, licensed companies sold recreational marijuana for more than $19 million. Despite having less than 20,000 residents, the town's advantageous location straddling the Mexican border has contributed to these astronomical sales numbers.
In New Mexico, individuals aged 21 and older can purchase up to 2 ounces (57 grams) of marijuana, equivalent to approximately 60 joints or cigarettes. Alternatively, they can buy comparable amounts of liquid concentrates and edible treats.
However, legal experts caution that New Mexico customers who purchase across state lines may face criminal consequences, particularly in neighbouring Texas, where marijuana remains illegal.
Michelle Lujan Grisham, the governor of New Mexico, and other Democratic lawmakers fought for recreational cannabis legalization. They considered it a way to strengthen and diversify the state's economic base. They also sought to address the detrimental effects that marijuana prohibition had on low-income and minority populations. This included automatic dismissal or erasure of some past cannabis convictions and reducing financial barriers for startup businesses in the cannabis industry.
Medical Cannabis in New Mexico
The state's journey into the realm of cannabis began back in 2007 when Governor Bill Richardson signed a bill legalizing its medical use.
Interestingly, even before the 2007 law, New Mexico had taken pioneering steps in medical cannabis. As early as 1978, a law permitted medical use but was limited to a federally-approved research program. This 1978 law was the first medical cannabis law implemented by any state in the United States.
New Mexico has been developing a medical marijuana program with strict rules for more than ten years. Medical marijuana sales totalled an astonishing $187 million in the year before March 2023. Participants in the state's medical program must meet a stringent set of requirements covering various illnesses like cancer and post-traumatic stress disorder.
Conclusion
The revocation of the marijuana retailer's license in Albuquerque, New Mexico, is a stern warning to those selling or receiving out-of-state cannabis products. The state's legalization of recreational marijuana for adults has brought challenges, with concerns about interstate trade and the need for strict compliance with state laws.
As New Mexico navigates the complexities of its cannabis industry, it remains crucial to strike a balance that ensures product safety, supports local economic development, and addresses any imbalances in the market. With the CEO of Ultra Health advocating for easing restrictions on large-scale cultivation, the state's approach to cannabis regulation will likely continue to evolve to meet the needs of its residents and businesses.
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