Eight licensed New Mexico marijuana companies who sued U.S. Customs and Border Protection after agents seized more than $1 million worth of legal cannabis had their lawsuit dismissed by a federal judge on Monday.
Because cannabis remains an illegal Schedule 1 controlled substance under federal law, federal authorities such as Border Patrol agents can lawfully seize even state-legal marijuana at interior checkpoints, Chief Judge Kenneth Gonzales of the District of New Mexico ruled.
The situation began in February 2024 under the Biden administration when New Mexico cannabis companies, shipping product within the state but within 100 miles of the U.S.-Mexico border, began losing product and cash during CBP stops.
No arrests were made, according to court records.
In two cases, federal authorities also seized vehicles, but returned them after 72 days in one instance and 43 days in the other, according to court records.
After a dozen stops and subsequent seizures – and pressure from Congress to explain – the cannabis companies sued in October 2024, alleging violations of their Fifth and Tenth Amendment due process rights.
Attorneys for CBP and the Department of Homeland Security countered, arguing that cannabis’s status under federal law meant product and cash could be seized.
In a 20-page decision, Gonzales agreed.
Border Protection can seize state-legal cannabis, judge rules
“Courts have repeatedly rejected due process claims alleging property rights to or business interests in marijuana,” he wrote in his 20-page decision.
“Because federal law does not recognize property interests in marijuana or marijuana-related activities,” the cannabis companies can’t claim their due-process rights were violated, his decision stated.
However, Gonzales did seem to acknowledge that federal authorities made a choice.
The companies did act “in compliance with state law amid shifting federal enforcement policies,” he wrote.
“Nevertheless, the Court’s purview is limited to determining whether CBP could lawfully seize the cannabis products under current federal law, not whether it should have done so,” he added.
Cole Memo, marijuana rescheduling no defense against federal authorities
- Mesilla Valley Extracts, a licensed manufacturer in Las Cruces.
- Royal Cannabis, a vertically integrated licensed company that does business as Baked Chicken Farm, the operator of a large-scale cultivation facility in Berino, near the Texas border.
- Super Farm, which does business as Smokey Road Farms and is a vertically integrated licensee in La Mesa.
- Impact Farms, a microbusiness licensee in Albuquerque.
- Chadcor Holdings NM, which operates as Top Crop Cannabis and is a vertically integrated licensee in Las Cruces.
- Mylars, a licensed Las Cruces-based manufacturer and distributor.
- Rollin Love, a licensed retailer in Golondrinas.
- Desert Peaks Farms, a licensed cultivator in Mesilla Park.
Messages seeking comment from several of the plaintiffs, including Mesilla Valley, were not immediately returned on Tuesday.
Filed in the waning days of the Biden administration, the lawsuit’s status was initially unclear when the second Trump administration began.
In their lawsuit, attorneys for the plaintiffs cited both the 2013 Cole Memo and the more recent proposal to reclassify cannabis as a Schedule 3 drug.
But neither marijuana rescheduling, which has yet to be finalized, nor the since-rescinded nonbinding memo “alter federal law,” Gonzales wrote.
“Indeed, Congress has decreed explicitly that Schedule I controlled substances are ‘deemed contraband and seized and summarily forfeited to the United States,’” he wrote.
“Marijuana remains contraband under federal law notwithstanding evolving enforcement policies or prospective regulatory changes.”
Why are New Mexico operators running greater Border Protection risks?
With no license caps and with customers drawn from nearby Texas, New Mexico cannabis operators enjoyed an initial boom.
But with more than 3,000 licensed operators competing for about $40 million in monthly sales, economic pressures may have compelled operators to run the risk of Border Protection seizures, MJBizDaily reported.
CBP has jurisdiction over areas within 100 miles of an international border.
The permanent Border Protection checkpoints in New Mexico were a known hazard when the state legalized adult-use marijuana in 2021.
The next year, 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.
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Some companies deliberately located both cultivation and retail to avoid Border Protection, operators told MJBizDaily.
It’s unclear whether the cannabis seizures continued after Trump took office.
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
