Duke City Cannabis Faces Regulatory Scrutiny: Settlement Reached
In recent months, Duke City Cannabis, a licensed cannabis business in New Mexico, has found itself at the center of a regulatory dispute with the New Mexico Regulation and Licensing Department, Cannabis Control Division (CCD). The business was issued a Notice of Contemplated Action (NCA) after alleged violations of the Cannabis Regulation Act (CRA) and associated rules surfaced. The case has now been resolved through a settlement agreement, but the incident highlights the growing pains that some cannabis businesses face as the industry continues to mature under strict state oversight.
The Violations Leading to the NCA
The CCD, responsible for enforcing compliance with state cannabis laws, identified several violations at Duke City Cannabis. According to the NCA, the company was cited for the following issues:
Refusal of Entry: The CCD alleged that Duke City Cannabis did not provide inspectors access to their facilities for compliance checks. This is a significant infraction under state law, as regulators must be able to inspect businesses to ensure they are following cannabis regulations.
Improper Digital Surveillance System: The company's surveillance system reportedly did not meet state standards. New Mexico cannabis businesses are required to have comprehensive digital surveillance that covers key areas such as product cultivation, processing, storage, and points of sale. The CCD found that Duke City Cannabis failed to effectively record and monitor these areas.
Uncertified Weighing Scales: The weighing scales used in the operation were allegedly not properly certified or calibrated as required by the New Mexico Department of Agriculture. Accurate weighing devices are critical in ensuring product consistency and regulatory compliance.
Lack of Food Handler’s Cards: Employees involved in cannabis production and handling were found to be lacking valid food handler’s cards. These certifications are mandatory to ensure proper handling and safety measures for consumable products.
The Settlement Agreement
Following the NCA, Duke City Cannabis entered into a settlement agreement with the CCD to resolve the violations without undergoing a formal disciplinary hearing. The agreement allows the business to avoid more severe consequences such as license suspension or revocation, provided they comply with the settlement's terms.
As part of the settlement:
Fines: Duke City Cannabis agreed to pay a $2,000 fine, spread over four payments of $500 each. The payments must be completed within 100 days of the settlement's execution.
Suspension Clause: Should Duke City Cannabis deny entry to inspectors again, the company would face a 14-day suspension of its cannabis license. Additionally, failure to meet the payment schedule could also trigger further penalties.
Moving Forward
The resolution of this case through a settlement demonstrates the CCD’s intent to work with businesses to rectify compliance issues while holding them accountable. Duke City Cannabis has avoided the more severe penalties of license suspension or revocation but will need to remain in full compliance to avoid future scrutiny.
As the cannabis industry in New Mexico continues to grow, regulatory oversight will only become more stringent. Cannabis operators will need to ensure that their facilities, procedures, and staff are all in line with state requirements to avoid penalties or worse, the loss of their license to operate.
