New Mexico Asks Court to Halt Sales at Rulebreaking Dispensary

Officials allege the dispensary used stickers to cover up a symbol denoting the products originated in California.

New Mexico cannabis officials asked a district court to halt sales at a licensed marijuana shop they say has been illegally selling out-of-state marijuana and manufacturing its own products without proper permits.

The state Cannabis Control Division announced the action against Albuquerque-based Sawmill Sweet Leaf on Tuesday in a press release. The agency accused the retailer of selling California cannabis goods – a violation of both state and federal law – and also said the business was illegally manufacturing cannabis extracts.

“A key component of compliance actions is the ability to suspend licenses immediately if they pose an instant threat to the health, safety, and lives of consumers,” Linda Trujillo, the superintendent of the New Mexico Regulation and Licensing Department, said in the release. “While the licensee in question will still receive due process through a formal hearing, we can now ensure New Mexicans are protected from dangerous products or a life-threatening explosion in the interim.”

The out-of-state products allegedly sold by Sawmill Sweet Leaf had not been tested in accordance with New Mexico state law, the CCD said. Additionally, the agency found that the business had been “operating an unlicensed closed-loop extraction system” that “poses a risk of fire and/or explosion that may result in severe bodily harm or death.”

New Mexico Sawmill Sweet Leaf injunction

During an inspection on July 19, according to the injunction request, a CCD official found that when “staff pulled back the stickers on the finished cannabis product, it was evident that the stickers were placed to cover up a symbol to denote that the cannabis product originated in California.”

Some of the products in question were labeled as having been made by Sunny Slabs, a cannabis business with a footprint in California and Colorado, according to the injunction document, but which has no legal or licensed presence in New Mexico. The CCD also found that Sawmill Sweet Leaf did not have proper shipping or inventory manifests for “most of the cannabis product found on-site” during the July 19 inspection.

Sawmill Sweet Leaf holds retail, microbusiness, producer microbusiness, and manufacturer II permits, but none of those allow the business to perform the type of extraction it’s been conducting, the CCD asserted.

The move marks the second time the agency has taken action against a local dispensary for allegedly selling marijuana from California, after the CCD’s parent agency, the Regulation and Licensing Department, revoked the retail permit last month of another Albuquerque shop, Paradise Distro, for the same violation.

But a new state law gave the agency the power to ask courts for injunctions against such businesses, which it said it’s using in this case to cut off sales and ensure the business stays shuttered.

A hearing for the Sawmill Sweet Leaf case has not yet been scheduled, and the company did not respond to requests for comment from KRQE.

The news again highlights the ongoing problem of illicit but sometimes legal cannabis flowing illegally out of California and into other state markets across the country.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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