Cannabis Control Division Initiates Disciplinary Action Against Maggie's Farm
In a significant regulatory development, New Mexico's Cannabis Control Division (CCD) has taken disciplinary steps against Maggie’s Farm, a cannabis business operating under WH Agriculture, LLC, SR Agriculture, LLC, BC Agriculture, LLC, and RL Agriculture, LLC. The case, officially labeled as 2024-015, outlines multiple violations of the state's cannabis regulations, potentially leading to severe penalties including license revocation, suspension, and fines.
Overview of Violations
Maggie's Farm is accused of numerous regulatory breaches, with the CCD listing 17 distinct violations. These range from failure to maintain proper chain of custody procedures to unsanitary facility conditions. At the heart of the violations is the mishandling of the state-mandated track and trace system (BioTrack), which is crucial for tracking cannabis products throughout the supply chain.
One of the major allegations is that Maggie's Farm failed to properly reconcile their cannabis inventory and did not accurately document the transfer or destruction of products. The CCD also found that a significant portion of the company’s cannabis plants were not tagged in the tracking system as required by law.
Quality Control Failures
Maggie’s Farm also faces charges of violating quality assurance standards. According to the CCD, the company did not conduct the necessary product testing and allowed cannabis that failed tests to be sold or transferred without remediation. This is a direct violation of state health and safety standards that aim to protect consumers.
Another serious allegation involves the use of unapproved pesticides on cannabis plants. This breach of the Pesticide Control Act could have serious health implications, further compounding the legal and regulatory risks for Maggie’s Farm.
Facility Concerns and Unauthorized Activities
The CCD’s investigation also uncovered unsanitary and cluttered conditions at Maggie’s Farm’s cultivation facilities. These conditions not only violate state health codes but also create an environment conducive to contamination and pest infestation, making the facility unsuitable for cannabis production.
Adding to the list of infractions, the CCD found that Maggie’s Farm was growing cannabis in quantities exceeding their licensed plant count, which is a direct violation of their production license. The company also failed to display the required licenses and permits in a conspicuous location as mandated by state law.
Potential Consequences
The Cannabis Control Division has given Maggie’s Farm 20 days to request a formal hearing or settle the case. If the company fails to respond, the CCD may proceed with penalties, including revoking or suspending the company's cannabis production and sales licenses. The business could also face significant fines and further legal consequences.
As New Mexico’s cannabis market continues to grow, the CCD’s actions send a clear message that non-compliance will not be tolerated. The outcome of this case will be closely watched by industry players and regulatory bodies alike, as it sets a precedent for how cannabis businesses are held accountable in the state.
Violations Against Maggie’s Farm: Case No. 2024-015
Failure to Maintain Chain of Custody Procedures
Regulation: 16.8.2.12 (A) NMAC
Description: Maggie's Farm failed to implement proper chain of custody documentation and tracking for cannabis products, which is required to ensure appropriate tracking from origin to sale or destruction.
Improper Inventory Reconciliation
Regulation: 16.8.7.10 (A) NMAC
Description: The company did not accurately reconcile cannabis products in the state’s track and trace system (BioTrack), leading to discrepancies in inventory records and unaccounted cannabis products.
Improper Use of Track and Trace System
Regulation: 16.8.7.11 (A) NMAC
Description: Maggie's Farm allowed inaccurate data entries regarding transfers of cannabis products, and failed to provide evidence that the transfers occurred as reported.
Failure to Meet Transportation Requirements
Regulation: 16.8.2.13 (B) NMAC
Description: The company did not generate required shipping manifests for the transportation of cannabis for testing, sale, and destruction.
Failure to Comply with Quality Assurance Requirements
Regulation: 16.8.2.22 (A) (16) NMAC
Description: Maggie's Farm failed to conduct routine quality testing as required by state law, violating their certification agreement with the CCD.
Failure to Maintain Remediation Procedures for Noncompliant Products
Regulation: 16.8.2.6 (A) (h) NMAC
Description: The company did not implement procedures to remediate or destroy noncompliant batches of cannabis products, allowing noncompliant products to be sold.
Use of Unregistered Pesticides
Regulation: 16.8.2.22 (14) & 16.8.7.15 (J) (2) & (3) NMAC
Description: Maggie's Farm used pesticides that were not approved by the New Mexico Department of Agriculture (NMDA) for use on cannabis.
Failure to Properly Retest Failed Cannabis Products
Regulation: 16.8.7.15 (N) NMAC
Description: After receiving notice of failed product tests, Maggie's Farm allowed the products to be sold or further processed without conducting a proper retest.
Improper Disposal of Cannabis Waste
Regulation: 16.8.7.15 NMAC
Description: The company did not follow state protocols for rendering cannabis waste unusable and unrecognizable before disposal, violating disposal regulations.
Failure to Properly Store Cannabis Awaiting Test Results
Regulation: 16.8.7.15 (L) (1) – (4) & 16.8.7.15 (O) NMAC
Description: Maggie's Farm did not segregate and properly store cannabis products awaiting testing, and failed to label them according to state requirements.
Failure to Comply with General Track and Trace Requirements
Regulation: 16.8.7.8 (A), (B), (C) & (D) NMAC
Description: Maggie's Farm did not properly tag cannabis plants or enter data into the BioTrack system, resulting in untracked inventory.
Failure to Install and Maintain Required Surveillance System
Regulation: 16.8.2.10 (D) – (G) NMAC
Description: The company failed to install digital surveillance systems in areas where cannabis products were being handled, as required by state regulations.
Unsanitary and Cluttered Facility Conditions
Regulation: 16.8.2.27 (F) (9) & (11) NMAC
Description: The facility was found to be unsanitary and cluttered with waste, creating potential contamination risks and pest infestations.
Operating without Proper Local Permits
Regulation: 16.8.2.8 (A) NMAC
Description: Maggie's Farm failed to renew a required permit from San Juan County for its licensed premises, violating local law.
Failure to Obtain Approval for Water Source Change
Regulation: 16.8.2.23 (A) (2) & (D) (3) NMAC
Description: The company used a well not approved by the New Mexico Office of State Engineering for commercial use without applying for a material change in water source.
Improper Display of License
Regulation: 16.8.2.8 (I) NMAC
Description: Maggie's Farm did not conspicuously display their manufacturing license at the facility, as required by state law.
Exceeding Licensed Plant Count
Regulation: 61-1-3.2 NMSA 1978
Description: Maggie's Farm was found to be growing significantly more cannabis plants than permitted under their licensed plant count, violating state regulations.
Cash Seizures in Colorado
In Colorado, Maggie’s Farm has been embroiled in legal and financial difficulties that recently escalated when sheriff’s officials in El Paso and Pueblo counties seized cash from several of the company’s dispensary locations. This civil process followed a ruling by an El Paso County judge in connection to a case involving Maggie’s Farm but was not linked to a criminal investigation. Locksmiths were called in to assist in gaining access to safes and doors at the Pueblo dispensary, where large amounts of cash, documents, and keys were confiscated.
These cash seizures come on the heels of five store closures across southern Colorado earlier in the year. Maggie’s Farm’s founder, Bill Conkling, stated that the closures were necessary due to unforeseen challenges. However, this marks a troubling pattern for the company, as the financial pressures continue to mount.
Contempt of Court and Arrest Warrants
Adding to the legal woes, an El Paso County judge has issued arrest warrants for the CEO, CFO, and managing partners of Maggie’s Farm after they failed to appear in court for a show-cause hearing. The hearing stems from a civil case filed by Raven Security Group, which claims that Maggie’s Farm breached a contract for security services at three of its Colorado locations. The security company is owed over $350,000, and after repeated non-responses from Maggie’s Farm, the court issued writs of garnishment, which recovered only a fraction of the debt.
When Maggie’s Farm continued to be unresponsive, the judge issued warrants for contempt of court. The company’s executives are now required to pay a bond and may face jail time if they do not comply with future court orders. Raven Security Group’s attorney expressed concern that Maggie’s Farm might file for bankruptcy, which could leave creditors like Raven with only pennies on the dollar.
Industry-Wide Challenges
Maggie’s Farm’s troubles are emblematic of the broader struggles facing the cannabis industry, particularly in Colorado. Statewide issues such as falling prices and increasing competition from other states have led to a dramatic decline in sales. Additionally, Maggie's Farm has been hit particularly hard due to its reliance on cash transactions in an industry that still faces banking limitations.
Conclusion
Maggie’s Farm’s future is uncertain as legal challenges in both New Mexico and Colorado pile up. With regulatory violations in New Mexico threatening its license and ongoing financial and legal battles in Colorado, including potential bankruptcy, the company faces significant hurdles. The combined impact of non-compliance, unpaid debts, and the broader market downturn may force Maggie’s Farm into a period of serious reorganization, or potentially, closure.
