The biggest weed story this year was the tug-of-war happening between state-licensed marijuana businesses and U.S. Customs and Border Protection (CBP) over interior checkpoint seizures.
Border Patrol agents have seized hundreds of thousands of dollars worth of legal marijuana products, cash and even worker vehicles from licensed businesses at checkpoints inside the New Mexico border since the beginning of the year. Products are neither returned nor accounted for, raising concerns about misuse or destruction of property. There have also been reports of cannabis workers being detained under harsh conditions. Workers have also reportedly been placed on international drug trafficker lists, despite no charges or prosecutions being pursued.
Despite talks between Gov. Michelle Lujan Grisham and the Department of Homeland Security — which oversees Border Patrol — and efforts made by the state’s congressional delegation, it seems that no solution was ever reached, and seizures continue to this day.
In October, a coalition of eight marijuana businesses filed a still-pending lawsuit against Homeland Security and Border Patrol over the seizures. The lawsuit calls for policy changes to protect licensed businesses from unjust confiscations without due process. The coalition’s attorney argues that the seizures violate property rights for state-legal cannabis businesses.
Oversaturation
Nearly everyone agrees: There are just too many pot shops in New Mexico, and the intense competition is causing many small businesses to go under. What they can’t agree on is whether the state should halt new licenses or not.
Legacy operators like Minerva Canna and Sacred Garden announced permanent closures in 2024, and Ultra Health reportedly shuttered 20% of its New Mexico stores.
The state’s Cannabis Control Division (CCD) has issued more than 1,500 retail cannabis licenses since adult-use sales began, and a number of critics have argued that the “open-faucet” approach to licensing needs to be paused to prevent further closures of smaller operators.
But many disagreed with the idea, arguing licensing caps go against the spirit of the law and that they won’t help small businesses since the big operators are already established in the market.
DEA drags feet on rescheduling
The long wait for President Joe Biden’s administration’s promise to reschedule marijuana continues as the Drug Enforcement Administration (DEA) takes its precious time to follow through.
In October 2022, Biden instructed the Department of Health and Human Services (HHS) to begin the process of investigating whether marijuana could be reclassified under the Controlled Substances Act. It currently sits on the federal list of the most dangerous drugs, alongside heroin and LSD.
In August 2023, the HHS recommended moving cannabis to Schedule III, which would allow researchers to study it with fewer limitations and allow pharmaceutical companies to develop drugs based on it. The recommendation was presented to the DEA, which was tasked with rulemaking.
The agency in September quietly accepted the HHS recommendation and began the rulemaking process after receiving over 43,000 public comments.
However, it doesn’t appear that the agency will make its final decision before the new administration comes into power, and experts are unsure how the changeover will affect the process.
New Mexico regulators drop the hammer
New Mexico’s cannabis regulators significantly stepped up rule enforcement over the last year under the leadership of CCD Director Todd Stevens.
The CCD has revoked the licenses of several bad actors and penalized others for major rule violations. But it now says it needs more authority to root out illicit operators.
Lawmakers are proposing a bill to expand that authority to include the power to seize or destroy noncompliant products. The proposed legislation would establish a Compliance Bureau staffed with certified law enforcement inspectors authorized to seize illegal cannabis and arrest unlicensed operators. The bill would also allow inspectors to mark non-compliant products and notify licensees of alleged violations. If the products are deemed illegal, CCD would be able to destroy them.
State officials, including Stevens and incoming state Sen. Linda Trujillo — who’s also the former head of the Regulation and Licensing Department — support the bill. They argue that stronger enforcement powers are necessary to combat illicit operators who sell unregulated cannabis, undercut licensed businesses and endanger consumers.
The move follows reports of unlicensed vendors openly selling black-market cannabis at public events.
Weed recalls
New Mexico saw three major product recalls in the weed industry this year — all of them over the use of banned pesticides.
The CCD in March ordered a recall of products from Got Greens for containing the prohibited pesticide malathion. In September, the division ordered a recall of flower from Maggie’s Farm that tested positive for pyrethrins. And the division recalled Stash House products from various state retailers after they tested positive for the banned pesticide spinosyn.
There were reportedly no health-related complaints filed about any of the recalls and the chemicals involved are only slightly toxic to humans.