Business
New Mexico Lawsuit Seeks Insurance Coverage for Medical Cannabis
Six medical patients and a cannabis company have filed a class-action lawsuit against seven insurance companies in New Mexico, arguing the firms should cover the cost of medical cannabis recommended as a behavioral health treatment.
A New Mexico cannabis company and a group of six medical marijuana patients have filed a class-action lawsuit that seeks insurance coverage for medicinal cannabis. The legal action was filed on Friday in Albuquerque state district court, with the plaintiffs arguing that medical cannabis should be covered because it is a valid behavioral health service.
The plaintiffs in the suit are New Mexico Top Organics-Ultra Health and six medical cannabis patients including state Sen. Jacob Candelaria. Documents filed in the case note that Candelaria has been a medical cannabis patient since 2019, when his physician recommended that he use medicinal cannabis to treat post-traumatic stress disorder after antidepressants failed to provide relief. Candelaria pays between $500 and $1,000 per month out of pocket for his medication because his insurer, Blue Cross and Blue Shield of New Mexico, fails to cover medical cannabis for its customers, according to the lawsuit.
With the legal action, the plaintiffs in the case are seeking “recovery for themselves, and for every other similarly situated behavioral or mental health patient unlawfully subjected to paying for the entire cost of medically necessary cannabis, in violation of state law.”
The lawsuit names Blue Cross and Blue Shield of New Mexico, True Health New Mexico, Cigna Health and Life Insurance Co., Molina Healthcare of New Mexico, Presbyterian Health Plan, Presbyterian Insurance Co. and Western Sky Community Care as defendants in the legal action. The lawsuit is based on legislation passed last year, Senate Bill 317, which requires insurers to cover 100% of the costs for behavioral health services, including treatments prescribed for behavioral health conditions. The measure was passed in April 2021 and went into effect on January 1 of this year.
“The idea of health insurance plans paying for medical cannabis may seem like an impossible dream, but all the foundational elements have already fallen into place,” Ultra Health president and CEO Duke Rodriguez said in a statement to the Albuquerque Journal on Monday. “Revolutionizing behavioral health care in New Mexico will take only a few small steps, rather than a giant leap.”
February Letter Sought Coverage for Medical Cannabis in New Mexico
In February, Ultra Health sent a letter to insurers and the Office of the Superintendent of Insurance seeking coverage for medical cannabis recommended to treat behavioral health conditions. The letter included data provided by the New Mexico Department of Health in April that indicates of the 134,307 patients enrolled in the state medical cannabis program, 73,000 have been diagnosed with PTSD.
“Ultra Health acknowledges that the idea of health insurers paying for medical cannabis may seem novel at first blush,” the company wrote in its letter to Presbyterian Healthcare Services.
“However,” the letter continues, “it is actually a rational, reasonable notion when considered in light of other New Mexico law. New Mexico already requires workers compensation insurers to pay for medical cannabis, and New Mexico already treats medical cannabis the same as conventional prescription medications. The fact that health insurers should—and will—pay for medical cannabis is not revolutionary at this point. It is the next logical step, and it is a small step, not a giant leap.”
True Health New Mexico and Blue Cross and Blue Shield of New Mexico declined to comment on the case, according to media reports. Molina Healthcare of New Mexico, Western Sky Community Care and Cigna did not immediately respond to requests for commentary. Presbyterian Health Plan and Presbyterian Insurance Co., which are overseen by the same management team, also declined to comment on the case but issued a statement on the companies’ policies.
“Presbyterian Health Plan is committed to ensuring that New Mexicans can access the behavioral health services they need,” spokeswoman Melanie Mozes said. “We have not yet been served with the lawsuit and will reserve comment for the appropriate venue.”
Rodriquez said that the lawsuit was filed after the insurers and state regulators failed to respond to the letter sent in February. He also noted that other patients who have been impacted by the insurers’ failure to cover medical cannabis prescribed as a behavioral health treatment are welcome to join the legal action.
“There will be more patients identified who have been harmed by insurers not lawfully abiding to the statutory duty of eliminating any cost sharing related to behavioral health services,” Rodriguez said. “Insurers have not acted in good faith.”
In an interview, Candelaria said that medical cannabis has helped him cope with PTSD and positively affected his life. He added that he joined the legal action to help all “New Mexicans who are struggling to pay for their health care.”
“Senate Bill 317 was transformational,” Candelaria said. “This suit, you know, it becomes necessary to actually make that transformation happen.”
Source: https://hightimes.com/news/new-mexico-lawsuit-seeks-insurance-coverage-for-medical-cannabis/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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