Ultra Health files complaint against NMDOH over licensures

Nicole Maxwell
Alamogordo Daily News
This April 6, 2018 file photo shows the leaves of a marijuana plant inside Ultra Health's cultivation greenhouse in Bernalillo, N.M.

SANTA FE - New Mexico Top Organics-Ultra Health has filed a complaint against the New Mexico Department of Health alleging the state doesn't have the authority to license legal cannabis manufacturers.

At issue is that Ultra Health believes licensed producers of medical cannabis face undue financial burdens compared to manufacturers of medical cannabis, a new category that came out of rules the DOH adopted in 2015.

Ultra Health — which is planning to open a production facility in Tularosa next month —is a licensed producer permitted to manufacture. The company argues manufacturers can operate at much lower costs than licensed producers, but aren't legally permitted to possess medical cannabis.

“Manufacturers are receiving pounds and pounds of medical cannabis every day to turn it into edibles, topicals, concentrates and more. Yet, in statute, they do not have the legal authority to possess medical cannabis," said Ultra Health Communications Manager Marissa Novel said via email. "This creates a huge gap in legality that manufacturers themselves should be concerned with. This is especially true as the program continues to grow.”

According to the New Mexico Administrative Code concerning medical cannabis licensing requirements, a licensed producer is someone or some entity that is "licensed to produce medical cannabis" and a manufacturer is "a business entity that manufactures cannabis-derived product that has been approved for this purpose by the medical cannabis program."

Ultra Health alleges that a 2015 rule creating the manufacturer's license contradicts the Lynn and Erin Compassionate Use Act.

“The New Mexico Legislature, in the Lynn and Eric Compassionate Use Act, clearly and obviously intended that the Department of Health license two, and only two, classes of persons and entities: licensed producers and patients/primary caregivers,” the complaint states.

The complaint states that Ultra Health is now operating at a disadvantage “as compared to manufacturers that pay far lower fees to operate.”

Currently, Ultra Health pays $90,000 in fees yearly to process and distribute cannabis under the existing rules, the complaint states.

“We also believe there is a competitive advantage issue at hand here, where approved manufacturers are required to pay a fee of $1,000 annually to operate in the state,” Novel said.

Ultra Health sees another issue with NMDOH oversight of both the manufacturers and licensed producers.

“Licensed producers are required to submit quarterly reports, annual audits and other tedious documentation to participate in the program, while manufacturers are allowed to conduct 30 percent of the program's business with little to no oversight by the New Mexico Department of Health,” Novel said.

Department of Health Public Information Officer David Morgan said the department had not been served notice of the lawsuit and "as general matter, we don’t comment about pending litigation.”