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City Council Affirms Revocation Of License For Cannabis Inspired Business

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The Las Cruces City Council unanimously denied an appeal from a local cannabis-themed retailer to keep its registration license, following allegations the business was in violation of city code. Speak Easy, a vendor for cannabis-themed goods, first received notification of the city’s intent to revoke the license in late September.

According to the city, these allegations stem from an investigation into the owner of Speak Easy and their alleged actions centering on possessing and distributing cannabis products within the establishment. City Community Development Director Larry Nichols says his department originally approved the license for retail sales like clothing.

“When the application was received for the business registration it was purported to be for retail sales. I believe it was a clothing t-shirt business,” Nichols said. “There was no mention of any other activity that was going to be undertaken.”

Following questioning from Las Cruces Mayor Ken Miyagishima, Nichols noted his department would not have granted the license if there was knowledge of cannabis products being gifted to customers following the purchase of other goods.

While an appeal to reverse the decision to revoke the license was filed, the unanimous council vote affirmed the revocation of the license. Matt Madrid, the attorney representing the owner of Speak Easy, says the establishment was following a practice used in other markets.

“Speak Easy did not invent the process of what's been known as gifting,” Madrid said. “It's occurred in several states that have gone to decriminalize marijuana and gone recreational. So, in several states, when it was no longer criminal to have marijuana on you, it's not criminal to give it to someone else.”

Last summer the state’s Cannabis Control Division issued a cease-and-desist order, calling on Speak Easy to suspend gifting. Since then, criminal charges have been brought against Speak Easy’s owner for alleged actions such as selling cannabis at the establishment. While that case has since been dismissed for failure to prosecute, it still has the potential to go before a grand jury.

Madrid asked the council to refrain from revoking the registration license while there is still potential for a criminal proceeding—though it was noted during the meeting that the matter is a civil one at the city level.

“I would suggest to the council that presumption of innocence is something that we all have a right to. If a restaurant owner gets a DUI, we don't take his business license before we know what happened,” Madrid said. “There is no evidence that since we got the cease-and-desist order...that we've done anything that doesn't comply with their regulations.”

The city's community development department says Speak Easy should be able to apply for a new license right away, though City Attorney Jennifer Vega-Brown did indicate some additional research is needed if the city wishes to enforce a waiting period.

“Usually when a business license is revoked, the business will gain their license when the thing that caused the revocation is remedied,” Vega-Brown said. “In this case, there's a pending criminal action, there's a potential for a grand jury indictment…So that's a difficult thing, because has the law been violated? We don't know.”

New Mexico’s Cannabis Regulation Act currently allows individuals to possess up to two ounces of cannabis. The act, which was passed last year, also established a timeline of spring 2022 for adult-use cannabis sales to begin in the state. Vega-Brown says the state’s new cannabis possession allowance doesn't automatically apply in a business setting.

“It's not going to be allowed in a business unless you have a consumption license and a license to sell,” Vega-Brown said. “This isn't a legal situation where it became legal in New Mexico and therefore it was legal for him to give it out. It was not because that's not a home. It's not a personal home. It was not a private residence.”

Councilor Johana Bencomo voiced her frustration that other local cannabis stakeholders will be negatively impacted by the alleged actions of Speak Easy.

“The cannabis industry as a whole already has an uphill battle in the public opinion and in the public eye,” Bencomo said. “For there to be bad actors who are in our community making decisions that are going to negatively impact the cannabis that a lot of us fought for…now Las Cruces is on the map for all the wrong reasons.”

Madison Staten was a Multimedia Reporter for KRWG Public Media from 2020-2022.