SANTA FE, N.M. (AP) — New Mexico health officials in late June briefly opened a window to submit applications for lucrative licenses for pot production and then approved the only application received, the Santa Fe New Mexican reports.
The Health Department's handling of the process that resulted in the license being issued June 28 to Albuquerque-based GH LLC after minimal public notice has prompted allegations of favoritism and calls for an investigation.
“In my opinion, this was a dirty affair,” said Willie Ford, managing director of Reynold Greenleaf & Associates, a consulting firm for cannabis businesses. “This was obviously somebody making it happen for somebody else.”
The state had not allowed producers to apply for licenses in the previous six years, as the new Cannabis Control Division of the state Regulation and Licensing Department prepared to take oversight of licensing of the cannabis industry on June 29. New Mexico this year legalized recreational marijuana and those sales will start by April 1, 2022.
The Health Department's June 23 website posting of “Medical Cannabis Licensed Non-Profit Producer Application Instructions” didn't explicitly say the department was accepting new applications, though an online application form gave a June 28 deadline, the New Mexican reported.
Documents obtained under a public records showed that GH LLC submitted a 713-page application for a nonprofit medical cannabis producer license June 25 and that two senior Health Department officials inspected the company's facilities two days later on a Sunday, one day before the license was granted.
GH LLC “submitted an application like everyone else,” said company founder Vance Dugger, who is also CEO or founder of three road service and towing companies.
Health Department spokeswoman Baylee Rawson told the New Mexican in an email that the agency “often posts announcements through the website" to inform license holders and patients about program updates.
Rawson said it wasn’t unusual for department officials to work on weekends and that the department had worked for months “on opening licenses for additional licensees to help ensure patients had additional options for obtaining their medication.”
Rawson did not answer follow-up questions on whether the department had disclosed it was working on such an effort, the New Mexican reported.
Ford and others in the industry said the application opening appears to have been kept secret deliberately.
“This new licensee process has certainly ignited a fair amount of distrust, raised eyebrows and questions,” said Duke Rodriguez, president and CEO of New Mexico Top Organics-Ultra Health, the state’s largest medical cannabis operation.
“There are a number of good folks who have invested time, effort and resources while not knowing there might have been an express lane,” he said.
“This is a lottery ticket,” Rodriguez said, adding people in the industry are referring to the license approval as “weedgate.”