Business
There Are Now More Cannabis Dispensaries Than Liquor Stores in Albuquerque
But cannabis businesses still have to fight like hell to succeed.
The city of Albuquerque now has more cannabis dispensaries than liquor stores open, KRQE News reports. New Mexico became the 18th state to legalize adult-use cannabis in 2021. They were the fifth to do so through the legislative process versus voter initiative. The law went into effect on June 29, 2021, making the announcement regarding cannabis shops news almost a year after marijuana became legal. However, the high number of stores is causing conflict between owners and turning local industry members against one another in a fight to stay alive.
“We were coming down to our very last, you know, of our financial security. And just in time we opened up and it’s, it’s been a blessing,” Andre Galarza told KRQE News about his family-owned cannabis brick-and-mortar, 505 Farms, which opened on Lomas Boulevard in December 2022. “We literally put our entire retirement, mine and hers. And we are literally what you call all in, like all in,” Galarza continued. Because their store is a cannabis microbusiness, they can only grow 200 plants at a time. “We only support New Mexico grown, New Mexico extracted, New Mexico business, period,” Galarza stressed to KRQE News.
While, in the ever-present battle between booze-hounds and potheads, this news from New Mexico is a win for the stoners, it doesn’t mean that starting a cannabis business in New Mexico has been easy. Like any other legal state (read about the mass exodus from California), marijuana shops must deal with extensive red tape and ongoing hurdles to survive in this cut-throat industry.
With more cannabis stores open than alcohol stores, Galarza and everyone else must deal with the competition in an industry flooded with players. The small business owner recently learned that an even bigger dispensary, ReLeaf Cannabis Company, is set to move two blocks away from 505 Farms into a former car lot.
Previously, Albuquerque denied the ReLeaf Cannabis Company the Lomas Boulevard location, as it was within 600 feet of 505 Farms, which broke a rule. However, along with a handful of other cannabis business owners on the street, ReLeaf Cannabis Company demanded the zoning hearing examiner make an exception to the rule and attended the hearing to stand up for themselves and make a case. ReLeaf Cannabis Company made the case that by using a vacant old car lot, they would be upgrading and improving Albuquerque. “We would be obviously putting back into it – into the community, redeveloping this area. They also employ local folks,” Johnn Osborn, a local cannabis attorney, explained, according to KRQE News.
It worked. Two weeks later, Galarza learned that Releaf Cannabis Company was cleared to set up shop nearby. However, as an insight into the ongoing litigation the high number of stores is driving, Galarza is currently working on appealing the decision. The city of Albuquerque is now wading through twenty other requests for exemptions to the 600-foot rule, fourteen of which they have granted, showing that, while it might create conflict between business owners, the New Mexico cannabis industry is sailing at full speed ahead. “The number of stores, the number of licenses statewide, has far exceeded even the most optimistic projections we had when we were looking at what we thought this might be before the law passed,” says Pat Davis, City Council President and co-founder of Weeds Cannabis Consulting Service, KRQE reports. So, while this may be good news for the cannabis industry on a large picture, smaller business owners such as 505 Farms fear they will have to shut down as the big guys take over. “If they were to open up next door, we’re pretty much done,” Galarza told KRQE. “I mean, a small business such as myself, can’t battle something that big, right? It’s not possible. Yeah, there’s no sleep. I mean, it’s terrifying.”
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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