Less than a week before the New Mexico Department of Health transferred authority over the state’s medical marijuana program to the newly created Cannabis Control Division, officials opened a tight window for producers to apply for a license for the first time in six years.
But the department did not inform anyone.
Only one company applied and received a lucrative “legacy” producer license for a fee of $ 10,000 just one day before the medical cannabis program was transferred between the two agencies. The move has sparked allegations of favoritism and calls for investigation by others in the cannabis industry.
“I think it was a dirty business,” said Willie Ford, general manager of Reynold Greenleaf & Associates, a cannabis company consultancy. “That was obviously someone who made it possible for someone else.”
The new cannabis control division of the state regulatory and licensing division was due to take over the oversight of the medical marijuana program and a developing industry for the legal production and sale of recreational marijuana on June 29.
A few days earlier, under the Publications tab on its website, the Ministry of Health published a notice entitled “How to Apply for Medical Cannabis Licensed Nonprofit Manufacturers”.
However, the June 23 publication did not specifically state that the department was accepting new applications and the agency did not advertise the application window or otherwise alert the public to the possibility. An online application form gave a deadline of June 28th.
According to documents received as part of a public inquiry, Albuquerque-based GH LLC, founded by Vance Dugger, filed a 713-page application for a nonprofit medical cannabis producer license on June 25. On June 27, Sunday, Dominick Zurlo, Director of the State Medical Cannabis Program, and Billy Jimenez, General Counsel and Assistant Secretary of the Department of Health, toured the company’s facilities in person. The next day the department issued a license.
Health Department spokeswoman Baylee Rawson wrote in an email Friday that the agency “often publishes announcements through the website”. The website is regularly visited by medical cannabis program patients and licensees, she added. “It is also one of the most important ways to present information and updates about the program, including meeting announcements, patient statistics, educational materials, and other reports and documents.”
However, Ford and others in the industry said the application opening appeared to be deliberately kept secret.
“This new licensee process must have raised some suspicions, raised eyebrows and asked questions,” said Duke Rodriguez, president and CEO of New Mexico’s Top Organics-Ultra Health, the state’s largest medical cannabis company.
“There are a number of good people who put the time, effort, and resources into without realizing that there might have been an expressway,” he said.
Larry Love, a medical marijuana advocate and host and producer for Santa Fe-based Medical Marijuana Radio, said he knew “many people” who would have applied for a license if they had known the department would have new medical applications ahead of time Manufacturer accepts the application process for a license under the recreational cannabis program.
He said, “It just doesn’t seem fair to the public to know that someone could get a license before anyone else.”
Rawson wrote in her email that the Department of Health had been working for several months “opening licenses to additional licensees to ensure patients have additional options for obtaining their medication.” She did not answer follow-up questions about whether the department had announced that it was working on such an effort.
When asked about the last-minute weekend inspection of GH’s facilities, Rawson wrote, “It is not uncommon for MCP employees to work weekends due to the heavy workload and demand for services.”
When asked whether it was customary for Zurlo and Jimenez to conduct inspections of potential producers, Rawson wrote that Zurlo had “conducted many inspections” but did not address whether Jimenez normally attended.
Dugger, who is also the CEO or founder of three road service and towing companies, said in a short interview on Friday: “We filed an application like everyone else.”
The Cannabis Control Division now processes all cannabis license applications.
“We are actively reviewing hundreds of grower license applications – and supplements from existing medical cannabis companies,” spokeswoman Heather Brewer wrote in an email. “We look forward to working with each applicant to help them complete their application or amendment in the order in which they are received.”
All licensing decisions made prior to June 29 “were made solely by the Department of Health’s experienced team,” wrote Brewer.
Emails received as part of the public record application show decisions made by senior officials in the Cannabis Control Division regarding GH LLC’s application after the broadcast of the medical cannabis program. On August 2, Nicole Bazzano, the division’s assistant manager, asked Joshua Wilson, a health and safety specialist, for an update on the status of the inspection of GH and its manufacturing facility.
“My impression is that they are just waiting for your inspection to start production / manufacturing, is that correct?” She wrote. “What can we do to ensure that they are put into operation properly and legally?”
The next day, Wilson wrote that he “had to go back and do some research” and that he “largely” had no information about the license approval.
“Processing, inspection, and approval were all at a level above the MCP licensing and compliance staff,” he wrote. “After looking at the permit letter, it appears that they have been granted some form of conditional permit that allows the infrastructure to be completed and requires re-inspection before they can be grown, manufactured or marketed.”
Wilson also noted that GH LCC, which he referred to as GH Labs, had originally applied for a manufacturing license.
“However, GH Labs then applied and was accepted for the [nonprofit producer license] that opened for a few days before the transition, “he wrote to the Cannabis Control Division.
“Before GH Labs did the [nonprofit producer license] I had written a rejection letter regarding several missing items and the fact that the application contained parts for cultivation and not for manufacture. Thus, the submitted manufacturing application was partially for the wrong license type. … I believe this was ultimately not taken into account at a higher level “because of the medical cannabis license” that allowed it to be made.
Neither Wilson nor Bazzano responded to a request for comment.
Ultra Health’s Rodriguez said the cannabis industry was “on its feet” because of the license granted to GH LLC.
“If there was really a desire to open up [the application process] how many people would have met before the 28th
“You get the Mack Daddy of Licenses,” he said. “You’re the vertically integrated license that allows you to do anything – produce, produce – you can do all of these things. The new approach under the [Cannabis Regulation Act] exposes you to this silo effect. You need to get a license to manufacture it. You need to purchase a retail license. You have to get a license to produce it. “
“This is a lottery ticket,” said Rodriguez, adding that people in the industry refer to the licensing permit as “weedgate”.
Love, the radio host and producer, agreed.
“It’s a money printing license,” he said.
Ford of Reynold Greenleaf & Associates said the matter needs to be investigated by authorities and the GH license should be suspended pending the investigation.
“There was a whole process that you went through last time with an application window,” he said, referring to an application opening in early 2015. “I didn’t see any of it here. …
“It is against a fair, level playing field for people who want to be in this industry,” added Ford, who is also the chairman of the board of R. Greenleaf Organics, a cannabis grower and pharmacy company in New Mexico. “It just stinks of favoritism.”