This story was updated Wednesday to include Speak Easy’s reopening and response to the state’s order.
LAS CRUCES – A local business that was “gifting” small amounts of cannabis to customers who made purchases announced Wednesday it will comply with a cease and desist order from New Mexico’s Cannabis Control Division.
Speak Easy NM, located at El Paseo Road and E. Idaho Avenue, held its official grand opening July 17, according to its Facebook page, which describes the store as an “organics company and gift shop.”
Attorney Matt Madrid — who represents the business — told the Sun-News on Tuesday the owners were temporarily closed while evaluating their legal options. On Wednesday, he announced the business would reopen “in full compliance” with the state’s order.
“The practice commonly referred to as ‘gifting’ will not occur on our premises, however we are still able to assist the community with CBD products and merchandise,” Madrid wrote in a news release.
According to the July 27 cease and desist order, Speak Easy was distributing cannabis or cannabis products as gifts to customers who purchased other items.
It demanded that the business cease that activity, but did not levy any penalties or order a halt to other business operations.
On July 20, the letter states two CCD investigators visited the store and met with owners Jason Estrada and Joseph Garza, who allegedly defended the practice as lawful under New Mexico’s Cannabis Regulation Act.
The law, which took effect on June 29, decriminalizes public possession of up to 2 ounces of cannabis, 16 grams of extract or up to 800 milligrams of edible cannabis.
It remains prohibited under federal law, which classifies cannabis (aka marijuana) as a Schedule One narcotic.
The CCD, a division of the state Regulation and Licensing Department, is in the process of promulgating the framework for legal cannabis sales through licensed vendors, to begin no later than April of next year.
The statute permits individuals to share cannabis with adults, but “without financial consideration” including indirect sales or trade. CCD maintains that the practice at Speak Easy amounted to illegal trafficking — a potential fourth-degree felony which could jeopardize a future application to be a licensed cannabis retailer.
The CCD alleges that Speak Easy was circumventing the law by trading cannabis for purchases of other items.
Citing a recent story by KVIA-TV which suggested larger gifts were offered in exchange for larger purchases, the CCD order argues: “The quantity of the ‘gift’ cannabis is directly bound to the dollar value of the non-cannabis product purchased, thus, ‘financial consideration’ (i.e. monetary value) has been established for each cannabis product being distributed by Speak Easy.”
The order demands that Speak Easy stop providing cannabis products to customers or face enforcement actions that could include criminal charges.
“We do believe there is some ambiguity in the law,” Madrid said, “but at the same time, the way the administrative process takes place is different than the criminal process.”
Madrid said the order itself cannot be appealed, as it was issued by a regulatory body and not by a court.
“The Cannabis Control Division will not tolerate any individuals or businesses who violate the Cannabis Regulation Act or otherwise diminish the integrity of the adult-use cannabis industry in New Mexico,” RLD Deputy Superintendent John Blair stated in a news release Tuesday afternoon. “All New Mexicans should be on notice that violations of the Cannabis Regulation Act will be met with swift, strong action from the state.”
On Wednesday, the business capitulated, stating: “It was not the intent of Speak Easy to circumvent the laws of New Mexico and we apologize to our customers and the community for any confusion this situation has caused. As the cannabis industry evolves in New Mexico, there will be many challenges and changes, Speak Easy looks forward to being legally involved at every level and continuing to provide high-quality products to our customers.”
Read the Cannabis Control Division’s cease-and-desist order here:
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