The New Mexico cannabis cowboys: Modern day desperados
NEW MEXICO (KRQE) – It was something once relegated to the shadows in back alleys and dimly lit street corners. But all that changed two years ago after lawmakers legalized recreational marijuana. In New Mexico today there are 13 times more cannabis stores than Starbucks. However, despite stringent laws and regulations a dark cloud hangs over the cannabis industry plagued by a thriving black market, flagrant criminal activity, and hundreds of millions of dollars.
It’s a throwback right out of the Old West where brazen desperados once roamed the territory with little fear of retribution. “It sounds like complete lawlessness but the reality is, it’s more true than not,” said Duke Rodriguez, CEO of Ultra Health, the largest licensed cannabis operation in New Mexico. “The industry is running amok,” said Will Glaspy, Executive Director of New Mexico HIDTA (High Intensity Drug Trafficking Areas). “We gave a storefront to the drug cartel when we passed recreational marijuana,” State Rep. Bill Rehm said.
Consider the evidence, from Clovis to Santa Fe, Albuquerque to Torrance County. There are so many cannabis-related violations, that regulators at New Mexico’s Cannabis Control Division are powerless to curb the illicit activity. “It’s horrible. It’s not the idea that I have for New Mexico,” State Senate Judiciary Committee Chair Joseph Cervantes said. “We know there’s crime, massive crime worth millions of dollars right under our nose and we’re not willing to do anything about it,” Senator Cervantes said.
(El Baile Event Center)
Exhibit A? The El Baile Event Center is a drug marketplace specializing in the sale of illicit cannabis products. From its Central Avenue location in Albuquerque’s Nob Hill, dozens of vendors gather each Friday to openly peddle everything from outlawed gummies and flower to bootleg edibles and vapes. “When I walked in, I tell you it was mind-blowing. The shocker is how blatantly open it was being conducted,” said Ultra Health CEO Duke Rodriguez who recently toured El Baile. “(There were) folding tables with products, everything from infused Rice Krispies to drinks to every imaginable product that … would be for sale. There’s no reporting of gross receipts tax, no payments of cannabis excise tax, completely unsafe and certainly untested products,” Rodriguez said.
“They’re selling unlicensed, untested cannabis that the state cannot confirm is safe for ingestion. I would say that that is a threat to public health and safety,” says Cannabis Control Director Todd Stevens. “(El Baile Event Center) is not a licensed cannabis facility and there are no actual New Mexico licensees at this facility. This would be considered criminal activity,” Stevens said. Because the Cannabis Control Division doesn’t have authority over unlicensed rogue operations, state regulators can only watch illicit transactions go out the door and hope police investigate. Ultra Health’s Duke Rodriguez says the El Baile Event Center cannabis products are “absolutely 100% illegal.” Why hasn’t it been shut down? “That’s the question many of us in the industry keep asking,” Duke Rodriguez said.
Dineh Benally poses for a photograph before a Navajo Nation presidential forum at a tribal casino outside Flagstaff, Ariz., Tuesday, June 21, 2022. (AP Photo/Felicia Fonseca, File)
And then, there’s Torrance County. In 2022, former Navajo Nation presidential candidate Dineh Benally was issued a cannabis license for a massive marijuana plantation near Estancia called Native American Agricultural Development Company. Only later did state regulators learn they had licensed an outlaw enterprise. “Native American Agricultural Development Company was found to be in violation of some of our most egregious statutory requirements,” Cannabis Control Division Director Todd Stevens said. “We revoked that license in December and issued a $1,000,000 fine,” Stevens says. Today, the fine remains uncollected. CCD Director Stevens admits his agency can only issue fines but has no authority to collect them.
Last year, the Office of the State Engineer opened an investigation into water rights at the Estancia cannabis production facility operated by Dineh Benally. Inspectors discovered the extensive marijuana operation, which includes some 40,000 cannabis plants and several hundred hoop houses, did not have valid permits for commercial water use. In July, the State Engineer’s Office sent the land owner a cease and desist letter. The land owner, Tom and Jerry Ranches said water wells on the cannabis farm were shut down last month. In a phone conversation with KRQE News 13, land owner Tom Gordon declined to discuss the lease of his land to Dineh Benally.
Meanwhile, it’s business as usual for the Native American Agricultural Development Company where tons of bootleg marijuana worth tens of millions is openly produced and shipped to points unknown. “They are no longer a cannabis licensed facility which would mean that any commercial cannabis activity going on at that location is now criminal,” Todd Stevens said. The CCD Director says illegal trafficking of cannabis is “a class four felony.” Native American Agricultural Development Company licensee Dineh Benally canceled a scheduled meeting with KRQE News 13 on the advice of his attorney.
Just down the road from the Native American Agricultural Development Company sits Bliss Farm, another vast cannabis operation with thousands of marijuana plants and more than 100 greenhouses. The Bliss Farm cannabis license was issued to a Chinese man named Chunlei Zhao who lists addresses in Farmington and Albuquerque. Cannabis Control Inspectors discovered some two dozen serious cannabis violations, revoked the farm’s cannabis license, and slapped the facility with a $1,000,000 fine which has not been paid.
(Bliss Farm | KRQE )
Bliss Farm is not the only rogue Torrance County cannabis farm. Since 2021, central New Mexico’s Estancia Valley has been overrun with at least seven multi-million dollar marijuana plantations with international connections. Each of the cannabis operations involves locally owned agricultural farmland leased to individuals of Chinese descent.
“These are large-scale operations that are packaging their marijuana and shipping them all across our country. They’re coming from the People’s Republic of China. They’re setting up their operations here,” said Will Glaspy who heads up a federal drug program that provides resources to local law enforcement agencies. “The legalization of marijuana has made it more difficult for our law enforcement partners to conduct their investigations and it’s provided some cover for the Mexican drug cartels and Chinese organized crime to be able to carry out their illegal activities, circumventing state law in the process,” Glaspy said.
Administrators with the state’s Cannabis Control Division say they don’t know the extent of black market marijuana in New Mexico. But industry experts who have studied the weed market put the price tag on bootleg cannabis here at a whopping half billion dollars. Ultra Health CEO Duke Rodriguez calls New Mexico’s marijuana marketplace, “the wild, wild west.” Buy unregulated, untaxed, untested cannabis and you risk unknown potency, banned pesticides, or dangerous mold.
“At least 50% of the cannabis commerce occurring in New Mexico is occurring in the illicit market,” Duke Rodriguez said. “This is a complete threat to everybody who’s invested in this industry on a legitimate legal basis. This is a crime. Why isn’t this crime being addressed,” Rodriguez said.
“When the original act was passed, the promise was that this was going to eliminate the black market and the criminal element in New Mexico. To the contrary we become ground (zero) for the illegal market in New Mexico,” State Senator Joseph Cervantes said.
To understand why so many rogue cannabis organizations proliferate, you have to look at the state’s licensing process. For example, after the Santa Fe-based pot shop, Unlimited Extract got a state cannabis license, its operation was hardly by the book. Unlimited Extract openly touted banned products on its website and directed a parade of customers to a clandestine marijuana store in the garage of a Santa Fe residence. By the time state inspectors got wind of the illicit operation, they said Unlimited Extract was “out of compliance with everything.”
(Unlimited Extract banned products listed on its website)
(Unlimited Extract State Licenses | KRQE)
“We did have evidence that (Unlimited Extract was) operating out of a residential garage that does not have a license,” Cannabis Control Director Stevens said. “That would be an unlicensed premise, which would be criminal in nature. Anyone conducting commercial activities without a license would be (unlawful),” Stevens said. State cannabis regulators have filed a Notice of Contemplated Action relating to the Unlimited Extract operation and disciplinary action is pending.
If Unlimited Extract wasn’t compliant with state cannabis regulations then how did the Santa Fe pot shop get a state-issued cannabis license? The answer relates to compliance inspections of a licensee’s premises by state inspectors. According to CCD Director Stevens, “In my opinion, they’re one of the most important, if not the most important part of the process is inspecting these facilities to ensure that these businesses are compliant (with regulations).” However, in the case of Unlimited Extract, the business wasn’t inspected until months after its cannabis license had been issued.
New Mexico takes a unique position on cannabis licensure. Here, marijuana licenses are issued on the honor system where state credentials are issued to practically anyone who applies. “We issue these licenses to good faith actors, and we assume people follow the law until we go into these businesses and find elsewhere,” Todd Stevens said. Out of 3,000 licensed cannabis facilities across New Mexico, Stevens admits, the Cannabis Control Division has only inspected about half of them. “With the limited resources that we have, sending officers to a place where cannabis activity is not licensed we don’t quite have that ability yet with the resources that we have. We focus on our licensed cannabis activities that are fully licensed,” Stevens said in July.
For example:
(CMF Production | KRQE)
CMF Production (Clovis) received its General Cannabis Production Facility license in 2022. One year later Cannabis Control Agents paid a visit to the CMF facility. Inspectors noted extensive Cannabis violations including illegal sourcing and distribution of cannabis products, improper labeling and tracking of products, unlicensed manufacturing activity and improper transportation of cannabis. CMF’s cannabis license was later revoked.
(Grass on Wheels | KRQE)
Last year the state issued Grass On Wheels (Albuquerque) a retail cannabis license. Apparently, the Cannabis Control Division didn’t read the Grass On Wheel license application. Eight months after issuing Grass on Wheel its cannabis license, state inspectors discovered the business was committing a host of violations including selling cannabis out of a van in a residential neighborhood.
It’s the same story all over New Mexico: Hundreds of uninspected licensed facilities with multiple unaddressed violations of the Cannabis Regulation Act. New Mexico may be the only state in the country that issues recreational cannabis licenses without first conducting a facility compliance inspection. With only nine field inspectors, Todd Stevens said his division lacks the resources to perform timely inspections, and, he admits, that’s a problem. “We don’t know that any licensed facility is going to be compliant without an inspection,” Stevens said.
“This is a narcotic. Right now we need to make sure that we have control over it,” State Senator Mark Moores said. “We have 30% of it coming from out of state. We have the (Cannabis Control) Division issuing licenses to people before they’re being inspected. This is a major concern. If we’re going to do this as an industry in New Mexico, we’ve got to get it right,” Senator Moores said.
“The decision to legalize marijuana was made. And while I didn’t support it at the time, it’s a decision and we’re going to work with it. I’m determined to make it work better. But right now we’ve really got chaos,” State Senator Joseph Cervantes said.
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Publish date : 2024-09-24 17:23:00
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