The New Mexico cannabis industry has morphed into a haven for lawbreakers and international crime rings, according to an investigative report by KRQE.
The investigation, which took a full year and was undertake by TV reporter Larry Barker, found that the New Mexico Cannabis Control Division has just nine full-time inspectors tasked with overseeing 3,000 licensed companies, and only about half of those facilities have actually been inspected since the legal marijuana market launched two years ago.
The lack of oversight has become a breeding ground for criminals, said Barker and Duke Rodriguez, the CEO of Ultra Health, a major cannabis chain in New Mexico.
The lack of enforcement overall, by both the CCD and law enforcement, has also encouraged crime rings from Mexico and China to set up shop in New Mexico, the duo said.
“Just in Torrance County alone, we found seven, at least seven, large-scale cannabis plantations which are owned and run by individuals from mainland China. Some of them are licensed. Some have had their licenses revoked. Some are unlicensed,” Barker said. “To date, there’s been no law enforcement activity aimed at these illicit cannabis operations.”
Part of the issue is in the licensing system itself, Barker said. The state grants business permits to anyone who applies without doing real due diligence or site inspections, choosing instead to rely on an “honor system.”
“The state simply took its hands off the steering wheel … just issue a license to anyone who marked the boxes. And that’s what they did,” Rodriguez said.
Rodriguez also said that when Gov. Michelle Lujan Grisham celebrated a milestone in March of the legal marijuana market surpassing $1 billion in sales, that it was more for the political optics. In reality, about two-thirds of marijuana transactions take place in the illicit market.
“We know that the potential in New Mexico’s cannabis market … is probably $1.4 billion a year. In the regulated market, we see less than one-third of that going through the actual system,” Rodriguez said. “Two-thirds of the actual cannabis activity in New Mexico is illicit.”
Rodriguez also said that only about 10% of the licensed companies, or about 300 of the 3,000, file mandatory reports with the CCD on a regular basis, which he said is evidence of systemic rulebreaking due to the lack of enforcement in general.
Barker added that the CCD lacks firepower when it comes to enforcement. He cited one rulebreaking cannabis farm that was fined $1 million for violations, but it hasn’t paid up or closed down.
“They have the authority to issue fines. They do not have the authority to collect them,” Barker said, adding that “as near as we can tell, (the rogue farm) is still in full operation.”
Rodriguez added, “That’s one location. I’d argue there’s dozens more.”
About half of the original 35 medical marijuana licensees in the state have quit the business altogether, Rodriguez said, after becoming fed up with unlicensed competition and the inability of authorities to get a handle on the situation.
“We’re just creating this overly illegal, illicit black market,” he said.
[[{“value”:”An investigation uncovered that the state’s regulators don’t have the resources or the power to enforce the rules.
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