Medical Marijuana

SANTA FE, N.M. — New Mexico proposed new pot production rules Tuesday intended to shore up supplies to its medical marijuana program without flooding the rapidly expanding market.

Under the proposal, the Department of Health would limit medical cannabis production to 1,750 mature plants for each licensed producer.

The prior 450-plant limit was struck down this year in response to a lawsuit by the state's largest seller and the mother of a child who is reliant on cannabis oil to treat a form of epilepsy.

A temporary production cap was set at 2,500 plants in March while new guidelines were drafted. It was unclear whether any cultivators had reached that threshold.

The Health Department said the proposed provisions were designed to balance concerns about adequate supplies against the risk of overproduction that have disrupted other state medical marijuana markets. Officials cited trends in Oregon's medical cannabis market as it authorized recreational pot.

A data analysis by The Associated Press shows medical marijuana programs have lost registered patients in states that have legalized recreational pot, as prices rise for remaining patients.

New Mexico established its medical marijuana program in 2007 and still prohibits recreational sales and use.

Under the production proposal, Immature seedlings would not count toward the plant-count limit, allowing cultivators to experiment with plant strains. It also would allow producers to apply for a 500-plant production increase beyond the cap starting in June 2021 if demands from patients outstrip supplies.

Ultra Health, which successfully challenged the previous production cap, continues to advocate for a higher plant count and more market-based approach to ensuring adequate supplies.

"We're kind of confused, this number isn't consistent with what producers said they wanted," said Marissa Novel, chief marketing officer for Ultra Health, which operates 17 dispensaries across New Mexico through a licensed nonprofit affiliate. "At face value it looks just as arbitrary and capricious as the first plant count."

Participation in the state's medical cannabis program has grown rapidly to 73,000 people after chronic pain and post-traumatic stress disorder were added to a list of qualifying conditions.

Last week, the list was expanded to include opioid use disorder, Alzheimer's disease, autism spectrum disorder and several degenerative neurological disorders.

As the program evolves, producers have warned that regulatory constraints on production may be pushing some medical marijuana patients toward the illicit market or recreational dispensaries in neighboring Colorado.

In developing the proposed rule, producers and patients were surveyed by a polling firm. State regulators also studied data from producers and national industry statistics.

About 55% of producers in New Mexico said they were unable to keep pace with patient demands for marijuana and related products.

The newly proposed rules also call for renewal of registration cards every three years rather than each year — a change approved by lawmakers.

A public hearing was scheduled for July 12 on the proposed rules.

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