Leading New Mexico medical cannabis operator sues DOH to increase plant-count limits

http://cannabisbusinessnow.com/new-mexico-legalization-way/

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Ultra Health, the largest vertically-integrated medical cannabis operator in the United States and one of the state’s main providers of pharmaceutical-grade cannabis, is pushing against plant restrictions. 

The ongoing litigation involving the New Mexico Department of Health (NMDOH) and Ultra Health has centered around the medical cannabis company’s efforts to overthrow the plant-count limit.

Based on Ultra Health’s argument, which aims asks a court to make it obligatory for state regulators to lift the plant-count limit, the restriction has impacted supply and pricing in an ever-expanding market.

Specifically, the latest version of the filing affirms that the state breached the terms of a 2019 court order that required New Mexico’s plant count limit to satisfy patients’ needs. The 2019 court order aimed to ensure that any imposed limit was reasonable, but supply and demand issues have surfaced nonetheless.

Original lawsuit contending New Mexico’s plant count limits was filed in August 2016

New Mexico’s plant cap regulation was first contended in 2016, when the original lawsuit was filed. The suit claimed that the NMDOH failed to abide by the rules and regulations laid out in the Lynn and Erin Compassionate Use Act — the legislation authorizing New Mexico’s Medical Cannabis Program.

Then, in November 2018, former District Judge David K. Thomson ruled that New Mexico’s plant count limits were arbitrary and capricious, which ultimately deflected from the goals of the Lynn and Erin Compassionate Use Act. 

“While it may be true that DOH was delegated the authority to regulate the system of distribution of medical [cannabis] in this State, it may not create its own arbitrary production number that does not have a reasonable nexus in law or fact to adequate supply for patients in the program,” Judge Thomson affirmed in his 60-page ruling.

A new cap of 1,750 plants was declared in fall 2019, after the NMDOH was ordered by a court to increase the plant cap and ensure that patient needs were met through utilizing a data-driven solution. Now, the most recent fight to increase medical cannabis plant count limits in New Mexico has been initiated by Ultra Health and a patient caregiver named Nicole Sena.

Despite the previous cap increase, New Mexico’s Medical Cannabis Program struggled to distribute an adequate supply of the plant among a swelling patient count.

Limitations on medical cannabis in New Mexico must be lifted to satisfy ever-growing patient demand

The latest argument emerges in the midst of legalization-related discussions in the State Legislature; lawmakers are becoming increasingly interested in legalizing cannabis following neighboring Arizona’s successful ballot initiative in November.

According to Ultra Health CEO Duke Rodriguez, nearby Arizona and Oklahoma have not imposed plant limits. His company fears that limits have been kept to a minimum as a means of preventing the company’s expansion statewide.

Nonetheless, rising enrollment rates indicate that more people are seeking out plant-based medicines. Although state regulators lifted the plant-count limit from 450 to 1,750 in 2019, Ultra Health officials maintain that the per-patient amount has been balanced-out by the medical cannabis program’s colossal growth.

By the end of 2020, New Mexico finished up with 104,655 registered medical cannabis patients a 30 percent year-over-year (YoY) increase. As of late 2020, the state had 34 vertical medical cannabis operators. 

Producers are attempting to meet the needs of 104,000 + patients with the same supply intended for 75,000 patients,” reads the complaint from Ultra Health officials, who also argued that the plant-count limit is equivalent to around just 0.5 plants per patient.

The complaint goes on to say that the department’s absent response to broadening enrollment opportunities in New Mexico’s Medical Cannabis Program “has provoked a crisis”, which has made it difficult for producers to satisfy patient demand. Consequently, prices remain high, the complaint continues.

A Department of Health spokesperson refused to comment on the lawsuit regarding New Mexico’s plant count limits.