Cannabis Control Division Revokes NNK Equity License; fines $1 Million

The New Mexico Cannabis Control Division has revoked the commercial cannabis license of NNK Equity, LLC, along with associated individuals Irving Lin and Bao Xue, following a series of significant violations of the state’s Cannabis Regulation Act (CRA). The decision, outlined in a Default Order dated August 7, 2024, highlights a number of severe breaches that led to this drastic action.

Background and Proceedings

The Division conducted a thorough review of NNK Equity, LLC’s operations and found multiple areas of non-compliance with state regulations. The respondents were initially served with a Notice of Contemplated Action (NCA) on July 15, 2024. Despite being given the opportunity to request a formal hearing and present their case, NNK Equity, LLC, Irving Lin, and Bao Xue failed to respond within the legally specified timeframe, leading to a default judgment.

Key Violations

The Division identified several critical violations by the respondents, including:

• Engaging in unlicensed commercial cannabis activities.

• Failing to maintain the necessary licenses at their premises.

• Not securing adequate water rights to meet the production facility’s needs.

• Lacking proper camera coverage and security measures.

• Failing to adhere to sanitary production practices, which could lead to cross-contamination from chemical or biological hazards.

• Ignoring state-mandated procedures for cannabis waste disposal.

• Inadequate storage and identification of toxic cleaning compounds, sanitizing agents, and pesticides.

• Non-compliance with cannabis plant transportation requirements.

• Failure to implement proper track and trace measures for cannabis products.

These violations are considered significant under the CRA, and the Division’s decision to revoke the license reflects the seriousness of the infractions.

Consequences

As a result of these violations, the Division ordered the immediate revocation of NNK Equity, LLC’s license to conduct commercial cannabis activities in New Mexico. The respondents are required to surrender their license within ten calendar days from the receipt of the order and are instructed to cease all cannabis operations immediately. Furthermore, they are prohibited from applying for any cannabis-related licensure for a period of three years.

In addition to the license revocation, the respondents have been fined one million dollars. This fine must be paid within ten days of the order’s issuance, and the payment must be made in the form of a cashier’s check payable to the New Mexico Cannabis Control Division.

Moving Forward

The Division has also mandated that the respondents inform them in writing of their plan to dispose of any remaining cannabis products. This step is crucial to ensure that any leftover products are handled in a manner that complies with state regulations and does not pose any further risks to public health or safety.

This case underscores the New Mexico Cannabis Control Division’s commitment to enforcing the regulations set forth by the CRA and maintaining the integrity of the state’s cannabis industry. Businesses operating within this sector are reminded of the importance of adhering to all legal requirements to avoid similar consequences.

Conclusion

The revocation of NNK Equity, LLC’s license serves as a stark reminder to all cannabis operators in New Mexico of the critical importance of compliance with state regulations. The Cannabis Control Division’s actions in this case demonstrate their zero-tolerance policy towards violations that compromise the safety and legality of cannabis operations within the state.