Cannabis Industry Alert: Why Do Federal Seizures Continue
Impacting New Mexico Operators

Caught in the Crosshairs: Federal Seizures Disrupt New Mexico Cannabis Markets

Summary

• The cannabis industry in New Mexico is facing a concerning issue as federal authorities are seizing state-legal cannabis, bringing attention to the conflict between state and federal law.
• Customs and Border Protection (CBP) checkpoints have confiscated cannabis products, causing financial losses for licensed operators.
• These products, which comply with state laws, are being treated as contraband at federal inspection points.
• The seizures have raised concerns about conducting business within the legal framework established by the state, as even products earmarked for lab testing have been confiscated.

In recent developments, the cannabis community in New Mexico finds itself at the nexus of federal law enforcement scrutiny, leading to significant operational and financial hurdles. Regulated marijuana businesses in the state are facing unexpected challenges due to a series of seizures executed by the Customs and Border Protection (CBP) at checkpoints, despite operating within the legal framework set forth by state law.

Since February, six separate incidents have been documented, leading to substantial product losses for licensed marijuana companies—totaling a financial impact of hundreds of thousands of dollars. The seizures, occurring at Alamogordo and Las Cruces inspection stations, included a wide range of regulated cannabis products such as flower, concentrates, edibles, vape pens, cartridges, and even lab sample products.

Notably, these interventions by CBP have also included the use of K-9 units to detect cannabis in transit vehicles and threats of arrest and prosecution by the Drug Enforcement Administration. Despite these alarming encounters, all drivers have eventually been released without charges, highlighting a discord between state legality and federal enforcement protocols.

This string of incidents has yet to be reported in other southern border states with similar cannabis markets, such as Arizona or California. However, the implication of these seizures casts a shadow on New Mexico’s burgeoning $600 million cannabis industry, fostering an environment of uncertainty and concern among operators.

In response, Kai Kirk, a managing partner at Head Space Distribution based in Las Cruces, alongside representatives from nine other licensed businesses, have sought intervention from U.S. Senator Mark Heinrich. Their plea is for an update to Border Protection policy to accommodate state-regulated cannabis shipments and for the return of seized products, aiming to mitigate the financial losses and operational disruptions faced.

The parties rallying behind this cause include notable industry names such as Amnesia Dispensary, Cannabis Chamber of Commerce, and Laughing Leaf Dispensary, among others. Despite these efforts, the seized products have not yet been returned, underscoring a pressing issue at the intersection of state rights and federal law.

This situation has garnered attention from both state and federal officials, with U.S. Rep. Gabe Vasquez, representing a significant demographic of the affected area, formally requesting a briefing on the matter from Homeland Security. The aim is to shed light on the rationale behind these seizures and to seek a resolution that respects both the federal stance on cannabis and the rights of states to regulate their cannabis industries.

CBP maintains that its actions are in line with the enforcement of federal marijuana laws, categorizing marijuana as a Schedule 1 substance. This reaffirms the complex landscape in which state-legal cannabis operations must navigate federal regulations, underscoring the need for a cohesive approach to cannabis legalization and regulation at the federal level.

It’s imperative for stakeholders within the cannabis industry and advocates for legalization to closely monitor this evolving scenario. The disruption to New Mexico’s regulated cannabis market not only affects those directly involved but could also signal broader implications for state-legal cannabis operations nationwide, emphasizing the critical nature of advocacy and dialogue in navigating the path forward.