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New Mexico cannabis regulators recently accused a local testing lab of a number of serious violations including falsifying data and transporting marijuana across state lines. Now, the Cannabis Control Division (CCD) is asking for a judge to step in and halt lab operations and halt the sale of compromised products.
In January the CCD published a Notice of Contemplated Action (NCA) that accused Bluebonnet Labs of violating 11 regulations and even committing an act that may be considered criminal by federal law enforcement authorities and those of two states.
The division recently submitted a petition to the Second Judicial District Court for a temporary restraining order and preliminary injunction that would suspend all of Bluebonnets cannabis operation and impose strict limitations on the movement of products that were certified as tested by the lab until they can be tested again.
It’s the result of a particularly troubling inspection conducted by CCD employees in November.
The CCD accused the lab of breaking a number of serious rules, including failing to properly maintain equipment and keep records of repairs, failing to properly store cannabis and testing chemicals, failing to document samples in the state’s track and trace system and failure to maintain past tests. Inspectors also said that lab workers couldn’t produce standard operating procedures or training materials for employees and had no proof that employees had had been trained.
The lab also allegedly falsified records by listing the wrong location address on its Certificates of Analysis.
On top of that, CCD inspectors found Certificates of Analysis that were sent from Texas to New Mexico, indicating that the lab sent samples of marijuana products to Texas to be tested, presumably at the Bluebonnet lab located in Dallas. If that’s the case, then lab employees may have broken the law by transporting weed across state lines to a state where the drug is still illegal.
That also means that those products were never tested in a New Mexico-licensed lab, and consumers can’t be assured that those products are compliant.
The revelations have left local industry players in shock.
“If even half the allegations in this case are true, we have failed the entire cannabis community — consumers, licensed operators and all stakeholders who rely on a fair and safe industry,” says Duke Rodriguez, CEO of Ultra Health. “Public health and safety should never take a backseat to bureaucracy or oversight failures.”
Rodriguez says the case highlights a troubling blind spot in the state’s cannabis laws. “This situation underscores the urgent need for stronger regulatory safeguards, especially pre-licensure inspections, to prevent bad actors from jeopardizing the integrity of the market,” he says. “The cannabis industry deserves better, and so do the people who depend on it.”
Rodriguez questions the petition, though. “Why no immediate product recall? It seems the regulator and likely some corners of this administration would prefer to sweep this issue under the rug than to be seen with egg on their face,” he says.
But the CCD might be stuck between a rock and a hard place. Under the current laws, the division doesn’t have the authority to seize suspicious products. It’s also required to produce test results proving that a product is noncompliant before it can issue a full recall.
“I think that CCD is trying to follow the letter of the law — innocent until proven guilty—and give this operator the full opportunity to respond to the NCA while also trying to address public safety,” says executive director of the New Mexico Cannabis Chamber of Commerce Ben Lewinger.
If the CCD goes through with a full recall, it could potentially affect tens of thousands of products. Bluebonnet is one of the most prominent labs on a very short list of only six licensed labs in the state. It would be the largest weed recall in the state’s history.
Meanwhile, lawmakers recently introduced a bill that could help to avoid situations like this in the future. House Bill 10, sponsored by Rep. Doreen Y. Gallegos (D), aims to grant greater power to the CCD when it comes to enforcing the rules.
“The Cannabis Control Division needs more authority to ensure that every license holder in New Mexico is playing on the same, legal field and have the authority to address illegal operations,” Gallegos writes in an email to The Paper. “We need to do everything we can to make sure New Mexico customers are purchasing New Mexico-made legal and safe products.”
The bill would give the department in-house, certified peace officers to investigate and pursue criminal charges against violators.
Lewinger says the Bluebonnet case underscores the need to see this legislation passed.
“This is exactly why we need the law enforcement provisions in House Bill 10,” he says. “Currently, the Cannabis Control Division has no administrative way of forcing an operator to hold a product while they continue their investigation. Every operator who gets a notice of contemplated action is due their day in court. So during this period, while we’re waiting for Blue Bonnet to respond to the NCA — including requesting a hearing—it’s important that the Cannabis Control Division have the ability to put a seize in place on product so that they’re able to retest it.”
The bill would give CCD the ability to crack down on big illicit operators in a timely manner. “The provisions of this bipartisan bill will allow us to timely respond to public safety issues regarding cannabis products and let our law enforcement partners focus more of their limited resources on other important issues while still guaranteeing due process rights are upheld,” says CCD Director Todd Stevens. “HB10 is a necessary step forward in balancing industry health with responsible oversight. We encourage lawmakers to support this bill to help sustain a safe and legal cannabis marketplace in New Mexico.”
In a news release from the Regulation and Licensing Department (RLD), which oversees the CCD, Gov. Michelle Lujan Grisham urged lawmakers to pass the bill. “To ensure that New Mexico’s growing cannabis industry continues to thrive, we need to reevaluate certain aspects of existing law to support the industry’s evolving needs,” said the governor. “We must act now to stop those who knowingly subvert state regulations aimed at keeping the industry responsible and safe. I urge legislators to support House Bill 10.”