Why are US officials seizing regulated cannabis in New Mexico?

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A New Mexico congressman is pressing the U.S. Department of Homeland Security to account for what regulated marijuana operators claim is a rash of seizures of state-legal cannabis at Customs and Border Protection checkpoints.

Six incidents of product loss totaling hundreds of thousands of dollars have been reported by licensed marijuana companies in New Mexico since February, when operators first alerted the state’s Cannabis Control Division about the situation, according to documents shared with MJBizDaily.

In addition to border crossings, Customs and Border Protection (CBP) maintains inspection stations along major highways in border states.

Between Feb. 14 and April 18, agents intercepted state-regulated marijuana products at the Alamogordo and Las Cruces stations operated by CBP, state documents show.

Products seized by CBP included at least 70 pounds of marijuana flower, concentrates, edibles, disposable vape pens, cartridges and product samples bound for lab testing.

In at least one of the cases, agents used a K-9 unit to identify a cannabis transit vehicle for a search.

During another incident, CBP agents informed the driver they were under arrest and indicated they could be prosecuted by the Drug Enforcement Administration, documents show.

The drivers transporting regulated cannabis between state-licensed businesses were detained for up to 2½ hours; eventually, all drivers and vehicles were released.

So far, there have been no reports of any similar stops in Arizona or California, other southern border states with regulated marijuana markets.

In addition to extensive product loss, the stops are casting a chilling effect over New Mexico’s $600 million regulated cannabis industry, operators say.

And federal officials indicated the interceptions will continue.

Significant product losses

Though drivers in the stops were released without charges, New Mexico cannabis companies have lost product worth in excess of “several hundred thousand dollars,” said Kai Kirk, managing partner of Las Cruces-based Head Space Distribution.

Kirk and representatives from nine other licensed marijuana businesses sent a letter to U.S. Sen. Mark Heinrich on April 10, asking for Border Protection policy “to be updated” to allow state-regulated cannabis shipments through and for “federally seized” product to be returned.

In addition to Kirk and Head Space, the signatories are:

  • Amnesia Dispensary.
  • Cannabis Chamber of Commerce.
  • Dark Matter/Top Crop.
  • High Maintenance.
  • Impact Farms.
  • Laughing Leaf Dispensary.
  • Moth Transportation.
  • The Plug.
  • Smokey Road Farms.
  • Spliff Quick Transportation.

So far, none of the product has been returned.

“It just seems like a whole line of cars is waved through, and then one of our guys gets pulled over,” Kirk told MJBizDaily.

“It creates a whole other level of stress for us.”

In some cases, transport vehicles intercepted by CBP were carrying state-regulated cannabis products belonging to multiple marijuana license holders.

And cannabis seized en route to testing labs forced operators to send new samples for testing.

According to documents obtained by MJBizDaily, companies that experienced federal seizures were unsure how to remove those items from the state’s BioTrack seed-to-sale program without triggering alarms that would indicate diversion to the illicit market.

“No paperwork was given to the driver for the seizure,” one such message indicated.

Escalating situation

The situation is drawing attention from state and federal elected officials, including U.S. Rep. Gabe Vasquez, a former Councilperson in Las Cruces, the largest city in southern New Mexico.

Product that’s shipped north from the Las Cruces area toward Albuquerque, about a three-hour drive away, that seems most at risk.

Vasquez’ office sent a formal request to Homeland Security, which oversees Border Protection, to request a briefing on the matter, Cecilia Belzer, the lawmaker’s spokesperson, told MJBizDaily.

State regulators acknowledge the problem but have yet to confirm how widespread it is or what might be behind it.

“We recognize the concern this presents for the cannabis industry in New Mexico and are working to collect as much information as we can related to this issue,” Andrea Brown, a state Cannabis Control Division (CCD) spokesperson, told MJBizDaily.

‘Subject to seizure’

In response to claims of a policy shift, CBP has said publicly that it is merely enforcing federal marijuana law, as it always has.

In response to questions from MJBizDaily, CBP pointed out that marijuana remains federally illegal and “that individuals violating the Controlled Substances Act encountered while crossing the border, arriving at a U.S. port of entry, or at a Border Protection checkpoint may be deemed inadmissible and/or subject to seizure, fines, and/or arrest.”

Marijuana “is still an illegal Schedule 1 substance,” Landon Hutchens, a CBP spokesperson, told MJBizDaily in a brief follow-up phone interview.

When encountering cannabis, “any federal officer will take appropriate actions,” he added.

Trouble with transport

Though CBP did not share data specific to the number of stops or seizures of commercial cannabis, the agency’s officers have yet to arrest anyone traveling through the state with regulated marijuana, Hutchens said.

Meanwhile, Kirk of Head Space Distribution said licensed operators are unsure how to proceed.

“How are we supposed to transport? Can we use other vehicles, can we get creative?” he asked.

“Could we lose not only the cannabis but also the vehicle?”

Known problem

CBP has jurisdiction over areas within 100 miles of an international border.

In addition to border crossings, the agency maintains checkpoints within the United States.

These include interdiction points along major highways, where travelers and vehicles might be stopped and inspected.

According to operators, the risk appears specific to cannabis traveling northbound from the Las Cruces area toward Albuquerque.

Southbound cannabis transporters don’t appear to be a target.

“This hasn’t been a problem before,” said Matt Kennicott, founder and CEO of The Plug, a New Mexico marijuana industry “organizing hub” and news source.

“We’re a little perplexed why this is suddenly happening.

“Some of it feels like they’re targeting (regulated) cannabis operators.”

‘Nothing new’

However, Border Protection checkpoints were a known hazard when New Mexico legalized adult-use marijuana in 2021.

In 2022, the American Civil Liberties Union of New Mexico warned that the presence of federal law enforcement in New Mexico threatened a “disastrous impact” on the state’s regulated  marijuana industry.

Some operators even set up their businesses with such risks in mind.

Ultra Health, which operates 37 marijuana retail stores in New Mexico, specifically chose locations for its cultivation and retail operations to avoid Border Protection, CEO Duke Rodriguez told MJBizDaily.

Even so, transporters for the company are still occasionally stopped; the most recent seizure was about “nine months ago,” he said.

“It’s nothing new,” Rodriguez said. “I don’t see any escalation or more aggressive action from CBP.”

Competing theories and continued risk

Regulated New Mexico marijuana operators are required to report any product losses to state officials within 24 hours, CCD spokesperson Brown said.

No loss statistics were immediately available.

In the absence of any clear explanation or reliable statistics from CBP, state operators are forced to concoct their own theories and plans of action.

Theories attempting to explain the phenomenon range from new or inexperienced CBP staff or “rogue” agents acting on their own accord – or, possibly, cannabis transporters acting indiscreetly.

Rodriguez believes any recent spike in seizures is attributable to new operators in the growing market.

But other operators insist the problem is new.

Colorado-based multistate operator Schwazze, which owns several operations in New Mexico, shipped product within the state for years before its first seizure earlier this year, said Dan Pabon, the company’s chief legal expert.

“It would be great to get some clarity” from federal authorities, he told MJBizDaily.

In the meantime, New Mexico operators have a choice: Shift the flow of goods or run the gauntlet.

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.