New Mexico regulators revoked an Albuquerque adult-use cannabis retailer’s license for unlawfully selling products produced in California.
Regulators accused Paradise Exotics Distro of selling cannabis products clearly marked with a California stamp of origin.
The store is the first in the state to lose its license, according to a news release from the New Mexico Regulation and Licensing Department.
“This revocation should serve as a warning to those selling or receiving out-of-state cannabis products,” Linda Trujillo, the Cannabis Control Division’s regulation and licensing superintendent, said in a statement.
“Our compliance officers are ramping up inspections and we will work to remove bad actors from within the New Mexico cannabis industry.”
Adult-use sales began in the state April 1, 2022.
The state recorded more than $300 million in sales in the first year.
But in a scene familiar to markets across the country, legal cannabis businesses say an illicit market is thriving nearly unchecked.
Regulators discovered the California-made product in a retail display case during an inspection, according to the Santa Fe Reporter.
In addition to “several examples” of marijuana products “not native to New Mexico,” the Cannabis Control Division also discovered more than $66,000 in cash and “other funds” not entered into BioTrack, the state’s track-and-trace software.
Paradise Exotics also sold edibles and concentrates despite reporting only “flower lot inventory” to the state, according to the Cannabis Control Division’s order.
State inspectors as well as “secret shoppers” working in tandem with a local media organization found out-of-state product sold at the store, Albuquerque TV station KOAT reported in February.
At the time, a representative for the store told KOAT that the “product was sold by mistake.”
Representatives of the store – which appeared to be closed this week, local media reported – did not attend an April revocation hearing, according to the state’s release.
Allegations of widespread organized efforts to sell products manufactured by licensed California businesses in markets as far away as New York have floated around the legal marijuana industry for years.