Largest N.M. medical pot producer suing state

By Steve Terrell
sterrell@sfnewmexican.com
Posted 12/19/18

Producers have to pay fees of up to $90,000 a year, while manufacturers of cannabis-infused products only have to pay $1,000 a year.

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Largest N.M. medical pot producer suing state

Posted

Ultra Health, New Mexico's largest producer and seller of medical marijuana, is challenging the way the state regulates makers of edibles, salves, lotions and other cannabis-infused products for sale in dispensaries.

A lawsuit challenging the state Health Department's policies for licensing these manufacturers asserts the law that created the state Medical Cannabis Program does not actually authorize the licensing of such businesses.

However, the lawyer representing Sandoval County-based Ultra Health, state House Speaker Brian Egolf, D-Santa Fe, said Monday the suit is not intended to put the manufacturers out of business.

"The goal is to come up with a fair fee structure," he said.

Under the current law, licensed producers grow and cultivate the marijuana. The producers transport raw plant material to manufacturers who in turn make candy, baked goods, beverages or products such as pills, salves or tinctures to be sold in the producers' dispensaries.

The suit says Ultra Health, which operates more than a dozen dispensaries statewide, is suffering "direct and immediate injury" because producers like Ultra have to pay fees of up to $90,000 a year, while manufacturers of cannabis-infused products only have to pay $1,000 a year.

The program has licensed 14 manufacturers of such products, according to the Health Department's website.

Unlike Ultra Health and the 34 other licensed medical cannabis producers in the state, including two in Taos, manufacturers don't have to be nonprofit organizations.

Ultra Health is owned by Duke Rodriguez, who was health secretary under former Gov. Gary Johnson.

Health Department spokesman David Morgan said his agency had not seen the lawsuit and doesn't comment on pending litigation.

Egolf said he would like to see a system in which a manufacturer would have to work under one of the licensed producers.

He also noted that the law only protects licensed producers, patients approved by the Health Department for the program and patient caregivers against criminal and civil penalties related to marijuana.

The Medical Cannabis Program has exploded in popularity in the past year. According to Health Department statistics, 66,725 active patients were in the program as of Nov. 30, about 21,000 more than at the same time last year.

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