Who’s Running Things? | 10.13.20
This time on Growing Forward we take a closer look at those people running the medical cannabis program, and how legalizing recreational cannabis would impact how they do business. This includes manufacturers and dispensary owners. It’s a diverse group of people at the heart of this industry, and includes some surprise names. We’ll also delve into other issues like plant limits and licenses and well as management companies, a fairly new approach to work within those license limits. (Note: Interviews for Growing Forward were all conducted via Zoom as a part of our COVID-safe practices. Originally our plan was to do interviews in person, but in order to maintain social distancing and to keep everyone involved safe and healthy, we decided to use the technology available to us.)
Episode Music:
Podington Bear – “Good Times”
Blue Dot Sessions – “Doghouse”
Blue Dot Sessions – “Building the Sled”
Blue Dot Sessions – “Pastel De Nata”
Blue Dot Sessions – “Roundpine”
Blue Dot Sessions – “Low Light Switch”
Christian Bjoerklund – “Hallon”
Growing Forward Logo Created By:
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“Growing Forward” is a collaboration between New Mexico Political Report and New Mexico PBS, and is funded through a grant from The New Mexico Local News Fund.
FULL TRANSCRIPT
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Andy Lyman: I’m Andy Lyman with New Mexico Political Report.
Megan Kamerick: And I’m Megan Kamerick with New Mexico PBS. And this is Growing Forward, a podcast about cannabis in New Mexico. This week, we’ll be looking at the business side of things.
Rachael Speegle: It wasn’t until I stepped into cannabis that I really started to understand the conversations that were happening around the country in the world as to how women are treated in industries. And it’s been challenging and it’s changed me.
Andy Lyman: There are more than two dozen cannabis production companies in New Mexico, plus a long list of manufacturers. Instead of talking to every single producer and manufacturer, we decided to talk to some of the more high-profile producers. Of course, one of the most high-profile producers is Pure Life. And that’s because of its CEO Darren White.
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9/11 dispatch operator: Attention all units, respond to Central and Broadway. Reckless and large crowd. It’s a war on drugs.
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Megan Kamerick: Okay, so there’s this 1990s video… Cops are rolling up in cruisers. They’re pulling guns out. No, wait. They’re pulling out a keyboard and they’re singing… Andy, what is this?
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Andy Lyman: Well, that’s Darren White when he was a police officer with the Albuquerque police department. My understanding setting this up is that the Albuquerque police department put together a band of officers called “the force” and a very hallmark moment of the 1990s is this “just say no” campaign.
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Megan Kamerick: So, White made a reputation for himself as staunchly against legalization. He would go on to become the state’s Public Safety Secretary under then Governor Gary Johnson.
Andy Lyman: He eventually resigned from that position publicly denouncing Johnson stance on cannabis legalization and decriminalization. White remained in the headlines for several years as he went on to become the Bernalillo County Sheriff, ran for us senate and eventually became the head of public safety in Albuquerque under then Mayor Richard Berry. He faced scrutiny when his wife was involved in a car crash and white showed up on the scene to take her to the hospital before officers had a chance to speak with her.
Megan Kamerick: He found himself under more scrutiny about five years ago, when it was revealed the former law enforcement officer with a hard-nosed view on drugs was the head of a medical cannabis producer.
Andy Lyman: There are still plenty of people who are critical of white, but now he speaks openly about his 180 on cannabis.
Darren white: For me, I left law enforcement in 2011. And I opened up a security consulting business. While I was doing that I was confronted by a few friends that I know. They asked me if I would do the security aspect of an application. And I said sure. I look at it and also kind of in the same time, Andy, I’ve been struggling with chronic pain. And I’ve been on a chronic pain management system for – it’s going on 20 years now. I’ve had back surgery, I’ve had extensive work done on my knee over the last 30 some years, and I just actually had it replaced. I had a couple of difficult times with it. And I started using a cream that a friend gave me. I was very skeptical of it. I didn’t want to do it at first. But you know, the only alternative for somebody like me was opioids. I mean, that’s really all it was. And so, I tried it. And it worked. [laughs] It worked. It helped me a lot. But I didn’t want to do it that way. I wanted to get a card and I did. I went in. I got a card and I became a patient. And I started using it that way.
Andy Lyman: So, obviously, you know, like many your views have shifted on this. What kind of insights can you share with people that might be a little bit iffy on this whole program?
Darren White: You know, look, I had a lot of friends over the years that you know, use cannabis. We all do. It’d be ridiculous to suggest otherwise. I had a responsibility to uphold the law. And I did. And I was always, when I heard that whole debate about medical cannabis, I was always very skeptical of that as well. And obviously the eye-opening experience for me was when it worked, and then realizing I was wrong. I was just wrong about it. It really does help a lot of people and their quality of life. You know, it’s funny, Andy you say it because it’s like, nobody gave a damn about the fact that I was prescribed opioids.
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Nobody cared. I mean, you know, I could have gotten as much as I wanted for as bad as my injuries are. And it’s a hell of a lot more dangerous taking a cocktail of these painkillers, than it is smoking some weed.
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Megan Kamerick: You, as you say, were in law enforcement for a long time. How do you think that our previous harsher drug laws and enforcement of them hurt the community? What did you see in that?
Darren White: Well, you know, Megan, that’s interesting because I hate to say this, I’m old enough to remember, when I started in Houston, I was in the middle of that crack war. And it was devastating some of those communities. And being somebody that’s been an elected official too, I get it. We overreact to everything we do. But, I also know they were plagued with, they saw people were dying, they needed to do something, and they went too far. The thing that we haven’t done in this country, and we need to do right now, is we need to start treating people who come into our system, regardless of what it is. There isn’t a prison cell, there isn’t a jail cell in this country, regardless of what the drug is, that will shake their addiction. We better start coming to an understanding of that. When I hear, you know, I know lawmakers don’t like to earmark and do set asides. But if we do a recreational model, I fully support that we look at using some of that money for treatment options for people, because they come out some of them, oh, my god, some of them, they never even skip a beat. The drugs are just as plentiful in some of our jails, and prisons, as they are on the streets. So, we need to do a better job. And that’s what we didn’t do. We just thought we could lock people up, and then kick them back out on the streets and go, “sure that’ll work. Right?” No, that’s poke and hope. That’s just like going well, “we hope it works.” And then we’re all surprised when recidivism rates are 75%. Because we put them right back into the same environment, most of the time hooked on the same drugs they were using when they got arrested, but we didn’t provide them any way to free themselves from it. And you know, for my republican friends, if that makes me sound like, you know, some wild eyed the liberal. Fine.
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But, look around, you know, we made mistakes. We went way too far with some of the sentencing. The hardest part of it was, we’ve never had been committed to treatment in this country ever. We just haven’t.
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Megan Kamerick: I just had one more question. While we were talking. I was curious, like, you guys have storefronts in your company? So, let’s say we pass legalization like, what does that look like? Then you have a medical section? Or is it all together?
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Darren White: You know, there’s been a lot of discussion about that. Do we have different sides? We’ve talked about it. We have from the standpoint of being very committed to preserving the medical program, we feel that there is a way that we can either do it on separate sides of the building, whatever it takes, making sure there are set asides, looking at some of those THC levels. But yeah, we don’t see a problem. We’ve looked at a lot of different scenarios. I think it was Colorado, Megan, that said, they actually haven’t divided there’s a counter for medical and a counter for recreational. And I don’t think the bills have specifically said that we had to do that. But we’re prepared to do it. I think what everybody in the medical program is committed to is preserving this program, and doing whatever it takes to make sure that that happens.
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Andy Lyman: I think it’s worth noting that even though Darren White is pretty open about his previous views and why they changed, there’s still plenty of people who look at Darren and pure life with a pretty cynical lens.
Megan Kamerick: Yeah, I guess it’s probably hard for some people to see his view change as anything but money driven, which probably makes him somewhat of a controversial figure in the cannabis community.
Andy Lyman: Right. And we can’t talk about controversial people without bringing up this guy.
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Duke Rodriguez: New Mexico may have had an early start in adopting the Lynn and Erin Compassionate Use Act. New Mexico had the opportunity to probably be a leader in this country when it comes to cannabis science. When it comes to cannabis medicine, when it comes to cannabis industry in total.
Andy Lyman: That’s Duke Rodriguez, President and CEO of cannabis producer Ultra Health. Rodriguez is also a former human services secretary of New Mexico.
Duke Rodriguez: And I served under Governor Gary Johnson. One of the things that Gary was most known for is, he actually advocated before Colorado adopted legalization, that New Mexico should consider it. I think, had Gary been successful, Today you would see New Mexico being far more the powerhouse in the southwest, probably benefiting the experience you saw happened in Denver and Colorado in general, and probably surpassing Arizona in cannabis. But we dropped the ball again. And so, we kind of lag.
Megan Kamerick: We definitely heard Duke’s name a lot while doing interviews for this podcast.
Andy Lyman: Yeah, he’s really made a name for himself in the industry here in New Mexico. There’s a long list of court cases that Ultra Health filed against the state in the past several years. But a lot of those cases resulted in some big changes to the state’s medical cannabis program. One notable change was a big increase in how many plants producers can have at any given time.
Megan Kamerick: So how many are they allowed to have now?
Andy Lyman: The state allows producers to have up to 1750 plants. There are some specifics about mature plants versus seedlings, but for simplicity sake, it’s 1750. But up until last year, that number was 450. And that change came after a judge’s ruling in response to a petition filed by Ultra Health. And actually, Rodriguez said even that new plant cap for producers is not enough.
Duke Rodriguez: I think plant caps, and the attempt to allocate plants, is an archaic system that most states have walked away from. There is no plant count in Arizona. There is no plant count in Nevada. There is no plant count in Oklahoma. There essentially is no plant count in Colorado. So, for all surrounding states, and probably most of the country that have medical systems or adult use programs, there is no such thing as a plant cap. The plant cap in New Mexico is an item of the past, primarily tied to the Susana Martinez administration, of believing that this was illicit drug dealing somehow become legal. Remember, we had a former governor in New Mexico who campaigned on the belief that she would eliminate the medical cannabis program. So, it’s steeped very deeply within even the current operators within the department of health. They’re former Martinez appointees. So, it’s hard to kind of break that historical bond to believing that there’s some value, some sort of harm reduction, by keeping a plant cap. But if you look at, logically, other states, plant caps don’t exist. We allow a certain level of capitalism. If you have the resources to build a bigger greenhouse than Ultra Health, we don’t object to it. We don’t think that small producers should be limited to their hopes and dreams, we don’t think large producers, everyone should compete with whatever the investment they want to make in this industry. So, a plant cap does nothing else and try to level the playing field. But in fact, what it does is limits the playing field and it actually costs patients more. So, in the end, to us, no plant cap. If you want a plant cap because it makes you feel like you’re going to have a limit, and no one’s going to grow a gazillion plants, which is never going to happen, you’re never going to grow more plants than what you can offer to grow and support the market with. Why would you throw resources, water people, buildings at something that’s never going to be sold? There is a natural ceiling. But rather than have bureaucrats determine what that ceiling is, let the marketplace, let the consumer decide what that ceiling should be.
Megan Kamerick: Andy, in a story you wrote earlier this year, you referred to Rodriguez as a perpetual thorn in the side of the Department of Health.
Andy Lyman: Yeah, he arguably is, there seems to be an ongoing fundamental disagreement between the department and Ultra Health. Here’s Dominick Zurlo, the director of the medical cannabis program explaining the department’s reasoning for the current plant cap.
Dominick Zurlo: So basically, what happened was, there had been some controversy over the last several years, about there not being enough product for patients, so there not being enough medical cannabis available. And so, what ended up happening is there was a lawsuit that occurred, and on the basis of that what the department had done, had done an emergency order emergency regulation, rather, that essentially put the plant limits temporarily at 2500 plants per producer. Now that plant count was just done as a stopgap measure. In the meantime, what happened is the department contracted to do a study to see what the needs of patients were with regard to adequate supply. And on the basis of the results of that study with what producers were growing, and what patients needed in order to meet that supply, that adequate supply level, was it was determined that having a 1750 plant count was going to meet those needs plus allow for the additional growth as the program continues to grow, which the program has continued to grow with regard to patient count. That’s really where that 1750 came from. It does also take into account the fact that patients can apply for their own license, for a personal production license, to grow their own medication. And we work a lot with patients who are trying to do that process, who are trying to apply, and those numbers continue to also increase. And so, I’m actually very proud of the fact that we’ve not only been able to increase the plant count, we’ve been able to offer better services towards patients with regard to their application process. And we’ve definitely increased how much supply is actually out in the community.
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Megan Kamerick: Andy, I can’t help but wonder if this whole industry is just a big boys club.
Andy Lyman: I think that’s a fair assessment. There are women in the industry but they don’t always make the headlines.
Rachael Speegle: As a woman, it’s been challenging. I never experienced misogyny and sexism and prejudice until I entered this industry. I was a mountaineer and a rock climber in an all-male environment. I was a skydiver, worked in health care, worked for FDNY as a paramedic in New York.
Megan Kamerick: That’s Rachael Speegle, the CEO of the cannabis producer, the Verdes Foundation.
Rachael Speegle: It wasn’t until I stepped into cannabis, that I really started to understand the conversations that were happening around the country and the world, as to how women are treated in industries. It’s been challenging, and it is, it’s changed me, it’s changed me so much that now I’m working on finding my authentic self again, and what it means to be feminine and be strong as a feminine leader in a very masculine environment. And I think women are particularly valuable when it comes to social responsibility. We are good business leaders when it comes to creating equitable jobs and understanding what it means to create an environment for our employees that is about the whole person and really takes into account a work life balance that’s sustainable. So, I think we’re good for business. And I think we’re really good for an emerging industry like cannabis that has come from prohibition. I look forward to continuing to be part of a voice of positive change.
Megan Kamerick: I just was curious if you could say a little bit more about, you know, the kind of misogyny that you encountered entering the industry and kind of what that looked like.
Rachael Speegle: It’s complimenting me for being a bitch, challenging environments. It’s, it’s judging me for being a bitch, and using you know, that language very casually. And again, on both sides as a compliment and as a criticism. Having men think that they need to stand next to me during my presentations to our association. Having individuals comment on my physical looks constantly, and proposition me sexually. It’s everything. It’s all encompassing.
Andy Lyman: And just to reiterate, we did not attempt to speak with the owners or principles of every cannabis-based company in New Mexico. But we did chat with Ben Lewinger, the director of the New Mexico Cannabis Chamber of Commerce.
Ben Lewinger: New Mexico benefits from being very diverse and kind of looking like what a lot of the rest of the country is going to look like in 20 years. Unfortunately, that’s not represented across the cannabis industry. The chamber has really espoused and, and at every point made an effort to make the cannabis industry one that is accessible for everyday New Mexicans, it’s accessible for everybody across the state. There are some lessons there for what other states have done correctly and what other states have not done correctly. If you look at California, where they wrote into statute that people of color, women of color, were going to have funding set aside for them to start their cannabis business, it was a huge failure. The funding never happened. So, what you have is groups of people who were expecting and relying on these supports, who were then left out to dry even more so than before. New Mexico in general, across industries, does a good job of having the industry represent what the state looks like as a whole and I would be lying if I, if I said that cannabis didn’t have a way to go. That’s one of the key focuses of the chamber is to making sure that the industry reflects and signals back to what the state looks like.
Megan Kamerick: But there’s still one major roadblock to diversity in this industry, which is that it’s basically impossible to get a production license right now. Here’s medical cannabis program director, Dominick Zurlo, again.
Dominick Zurlo: So, right now the state is not actually issuing additional licenses. There is not a cap per se, but it is a process, not quite an RFP or a request for proposal process, but very similar, where when the licensures do get opened up, what happens is the applicants apply. They have to complete their forms, they have to submit all the documents that are required, such as background checks for employees, their plans and procedures and policies of how they’re going to keep the patient safe when the patients come into a dispensary, for example. How they’re going to keep the medication safe, when it’s being grown, manufactured. All of those types of things, they have to submit those and then they’re reviewed. And then out of that process, those that have the highest scores essentially, or have the best proposals, are the ones that will end up getting licensed. But part of that will also depend on the projections of how the program is growing, what the needs of the patients will be. And so, at this point right now, with the new plant counts, we are seeing enough of a supply. And so, at this point, we haven’t opened those particular licenses. Now with that said, there are other areas of the industry, it’s not all just about the cultivation and production. There’s also manufacturing where organizations and companies are turning around and taking the cannabis and creating the variety of products that patients need and want. Those manufacturing licenses are open. So, manufacturers can apply or individuals who want to be manufacturers. The laboratory licensure is also open. So, organizations and labs that want to be doing the testing that we have coming up can also apply for it. We also opened up the courier applications, which has been extremely important during the covid-19 situation, because that really allows for there to be even less interaction between the patient and then other people, because instead of having to go to a dispensary, they can actually have it delivered to their home. And we’ve always had couriers, but we also with this current situation said we need to increase that. And so, we have.
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Andy Lyman: This is probably a good time to mention that while people could potentially get a manufacturer’s license, that is a company who makes extracts and edibles, the law does not allow manufacturers to grow their own cannabis. Which means manufacturers who do not have a license to grow can only get plant material from producers. And Duke told us he’s actually in favor of the program opening up more licenses.
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Duke Rodriguez: In New Mexico, there’s been an active debate about more licenses. It might surprise folks that we actually strongly support more licenses being issued. If some New Mexican wants to be in, as you call, the industry. And you want to participate on a lower scale, and be more what we call “craft” cannabis, I think there’s a place for you. The problem is New Mexico sets such a high price tag for those plants. If you subscribe to 1750 plants, that fee is 180,000. If you even try to stay less than 500 plants, that alone is 45-50,000. So, the numbers are important, because I don’t think a lot of mom and pop operators out there can afford not to pay 40,50 or 180,000 one time, it’s every year. And that kind of fee is unheard of when it comes to if you decided to open up a restaurant, or an animal grooming, pet grooming kind of facility, the fees to get into this industry are extremely high and extremely prohibitive. So, it’s not only just the number of licenses, it’s the regulatory environment that we’ve created to allow people to participate in this industry.
Andy Lyman: And so, there’s also a kind of a workaround for management companies, right, somebody that holds we talked to Dominick Zurlo, about this that a management company can hold more than one license essentially. And so, can you explain how that is sort of a workaround?
Duke Rodriguez: Rather than being more open, and allowing to those to take on the amount of challenge they want, the number of plants and number of locations, we become restrictive. And so, we’ve created this workaround, as you called it, which is probably the proper term. You have to find a, I hate to call it this a weak, colleague, a weak, brother in this industry, a weak sister, and you’ve got to approach them and you’ve got to offer them a package to say “clearly, you desire to be in this industry, you don’t have the resources to be in the industry, I will bear the risk. I will grow for you. I will open locations for you. And I will hire the people and put out the capital so that you can be more successful.” And so, these smaller operators are almost caught up in a position of having to lend, lease, loan, kind of offer their licenses to someone else to stretch those licenses out. The operator who acquires them needs the plants, needs the ability to support their growing operation. And so, they kind of have to enter into some relationship. Probably not the most efficient way to expand an industry but pretty much the only way we’re allowed to kind of stretch the limits of what we have today.
Andy Lyman: I’ll try and add some context here. Part of the original Lynn and Erin Compassionate Use Act mandated that medical cannabis producers had to be a nonprofit entity. The term is licensed nonprofit producer or LNPP for short. A few years back a handful of these LNPPs figured out that you could start a management company to oversee multiple LNPPs. So, what Duke’s talking about is essentially when a producer gives up their license, either voluntarily or by the department of health, there’s often a management company ready to take over that license.
Megan Kamerick: That means one management company could possibly have more than one license?
Andy Lyman: Yeah, and it’s become pretty commonplace and widely accepted by the department of health. Beyond that there seemed to be some concerns that some of these larger companies, specifically the management companies, may have an unfair advantage in a post legalization world.
Megan Kamerick: Here’s Dominick Zurlo with the medical cannabis program again.
Dominick Zurlo: The producers themselves can only have one license, but a management company could potentially have more than one that is based on the license and we currently do have 34 licenses that are active. You do have those different producers can actually grow up to however many plants that they’ve requested in their licensing each year. Now we’re about to hit the re-licensing period, which happens this summer. And so, we do anticipate that the number of plants that producers are growing and that their license for it will increase.
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Megan Kamerick: Growing Forward is the collaboration between New Mexico PBS and New Mexico Political Report, thanks to a grant from the New Mexico Local News Fund.
Andy Lyman: Our producers are Kevin McDonald and Bryce Dix. Our music is from Poddington bear and Christian Bjoerklund. Join us next week when we take a step back to look at what we know about the cannabis plant and its effects.
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Wylie Atherton: Discerning cannabis is an art form that’s been relegated to small, cloistered groups of people who really, really loved the plant really loved consuming it and taking all elements apart.
Megan Kamerick: Be sure to subscribe to growing forward wherever you get your podcasts. You can also get caught up on all of the episodes so far by heading to nmpbs.org and searching for “Growing Forward.”
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