The U.S. Attorney’s Office in New Mexico announced last week federal indictments of three people accused in a sprawling illegal cannabis cultivation and distribution operation, one with 25 farms covering some 400 acres near Shiprock.
That followed a raid a week earlier in Estancia on two other farms officials allege were operated by Dineh Benally of the Navajo Nation, one of the three facing federal charges.
As the news unfolded, members of the state-regulated cannabis industry were looking on.
“We saw the federal raids up in Estancia. If the Cannabis Control Division did have this type of authority, that problem and that issue probably wouldn’t have persisted for as long as it did,” said Matt Kennicott, who leads a group called The Plug, which supports small state-legal cannabis businesses in the Land of Enchantment.
The high-profile indictments come as lawmakers are set to discuss a bill that would give law enforcement authority to the New Mexico Regulation and Licensing Department, which houses the Cannabis Control Division, to ramp up efforts to stamp out the still-thriving illicit cannabis market.
The proposal, House Bill 10, would allow the Regulation and Licensing Department to employ certified law enforcement agents in a new enforcement bureau, primarily to investigate potential violations of the state’s cannabis law. The agents would be granted the same powers as other law enforcement officers in the state.
HB 10 is co-sponsored by House Speaker Javier Martínez, D-Albuquerque, and already has the backing of Gov. Michelle Lujan Grisham.
Three of its four sponsors are on the Commerce and Economic Development Committee, including Chair Doreen Gallegos, D-Las Cruces, which is scheduled to give the measure its first hearing Monday afternoon.
Lujan Grisham touted the bill in a recent statement, noting it would give the Regulation and Licensing Department “in-house, certified peace officers” to investigate and pursue criminal charges against individuals who violate licensing requirements and defy the Cannabis Regulation Act.
“To ensure that New Mexico’s growing cannabis industry continues to thrive, we need to reevaluate certain aspects of existing law to support the industry’s evolving needs,” the governor said. “We must act now to stop those who knowingly subvert state regulations aimed at keeping the industry responsible and safe. I urge legislators to support House Bill 10.”
Gallegos said in a statement, “I have heard from many business owners in my district and throughout New Mexico asking for better enforcement in our existing cannabis statute. In order for this industry to prosper, we need to tweak the law to make it work more efficiently.”
The proposal comes amid concern from many retailers and growers who have sounded the alarm about black market products and a high volume of state-licensed dispensaries they say have oversaturated the legal market. Concern has simmered about what that has done to prices for licensed retailers.
Under HB 10, the enforcement bureau of the Regulation and Licensing Department would have the ability to seize illegal weed and make arrests.
The agency currently has no authority to conduct criminal investigations or bring criminal charges but does have administrative enforcement powers over cannabis licenses. Law enforcement agencies are responsible for bringing criminal charges.
For Andrea Love, who owns a dispensary in Las Vegas, N.M., called Rollin Love, the bill creates something of a “catch 22.”
“It has the ability to benefit the industry as far as taking the illegal operators out of business and taking away their power,” Love said.
On the other hand, it would create more law enforcement in the state.
“Sometimes when you provide people too much power, it goes to their head. I feel like it could benefit us, but I also feel like it could hurt us in the same way,” Love said.
The Plug, Kennicott said, is neutral on the bill. He made comments similar to those of Love.
“We’ve got a lot of law enforcement authority in the state and we’re creating basically a brand-new law enforcement bureau, so it should be looked at with a sharp eye,” said Kennicott, who also owns a company in Socorro called High Maintenance.
“To be perfectly honest,” he added, “a lot of people in the industry are kind of skeptical of these types of solutions right now. We know something needs to be done, but up to this point, nothing has been done. We’re glad to see a solution put on the table, but a lot of us want to see how it’s going to work.”
Duke Rodriguez — the CEO of Ultra Health, which operates 29 cannabis dispensaries in New Mexico as well as massive facilities for growing and processing products — said anything that improves the level of enforcement of the underground market is a “plus.” Enforcement has been, in his view, a failure since New Mexico legalized sales of cannabis for adult recreational use in 2022, he said.
Rodriguez said his concern is the bill would, essentially, “create another group of people doing what law enforcement should already be doing.”
“I’m not sure it makes complete sense,” he said.
“If they are doing something novel, that’s wonderful. It should be given due consideration,” Rodriguez said. “But if it’s repeating what law enforcement is already legally responsible for, I find it redundant.”
The New Mexico Cannabis Chamber of Commerce, however, is in “strong support” of House Bill 10, Executive Director Ben Lewinger said. He noted retailers in the state say the underground market continues to have a negative impact on licensed manufacturers and distributors in the state.
“I think these law enforcement abilities should have been part of the original Cannabis Regulation Act, and if the RLD had the abilities specifically to seize and seize in place, we would have dealt with the big illegal farms in Estancia … more quickly,” Lewinger said. “We would have been more quickly able to root out bad operators with licenses.”
According to a news release from the U.S. Attorney’s Office in New Mexico, Dineh Benally, 48, his father, Donald Benally, 74, and Irving Rea Yui Lin, 73, of Califorinia face multiple charges:
Dineh Benally first made headlines when his cannabis operations in northwestern New Mexico were raided by federal authorities in 2020.
The news release alleges federal agents raided two cannabis farms in Estancia Jan. 23, identifying 10 Chinese workers and seizing about 8,500 pounds of cannabis, $35,000 in cash, illegal pesticides, 43 grams of methamphetamine, two firearms and a bullet-proof vest.