The New Mexico Cannabis Control Division recommended that a cultivation license be stripped from the owner of a large-scale, Estancia area marijuana farm.
Dineh Benally provided little defense during a hearing last week at the Seventh Judicial District Court in Estancia to counter the myriad alleged violations against his company, Native American Agricultural Development Company.
“I just ask that you have some empathy and give us a second chance,” Benally said in a rambling statement to hearing examiner Max Shepherd. “I know there are violations.”
Cannabis Division Counsel Robert Sachs outlined seven specific violations, including exceeding his grow limit of 1,000 plants by about 40,000 plants and failing to pay the permitting fee for extra plants, as well as failing to use plant-tracking software, unsafe working conditions, a lack of security surveillance, a failure to test the plants and not mitigating an outbreak of spider mites and potentially other pests.
The violations list was recorded following a lengthy September inspection by four CCD compliance officers, testified Santiago Silva, a compliance officer who supervised the process.
“There were quite a lot of violations,” said Silva, who testified that he’s conducted about 100 similar inspections in the nearly two years he has been with the division. “It was pretty grossly out of compliance.”
Perhaps the most egregious of the violations centered on the plant count, particularly as each plant requires a $5 grow fee, Sachs said, while pointing out that the maximum any operation is allowed is 20,000 plants.
“These violations entail the flowering mature cannabis plants found on site that far exceed the plant count allowed for this particular licensee, as well as far exceeding the maximum plant count allowed for any licensee and insufficient plant count fee paid for the plants that were on site,” Sachs said.
Benally, who represented himself, claimed the company sought a permit seeking the right to grow more plants, and had a verbal agreement both for the increase as well as payment.
But Sachs said everything the division does is in writing so every step can be tracked and verified.
Silva also testified that the plant-tracking software the state requires to follow the life of each plant from seedling to distribution was not being used.
“There was no track activity regarding inventory,” he said. “I believe they entered approximately 2,000 clones and the system that were never used, but as far as active growing plants, there was zero in our system.”
When asked what he would expect to find based on the company’sonline inventory, Silva said, “Nothing. An empty farm. Instead I saw about 40,000 plants.”
What’s more, the inventory-transfer tabs had nothing listed either outbound or inbound, “which is unusual,” he said. “Especially for having 40,000 plants. Because this is exactly where we see transfers from different licensees and for there to be none is disturbing.”
The information regarding quality assurance testing was incomplete, as well, Silva said.
“For 40,000 plants, you’re going to have quite a bit of flower that you would need to have tested,” he said. “And all of the test results would be populated in this tab, which there is none.”
The testing process, Silva said, examines potency, pesticides presence and microbial presence.
“All for the purpose of the safety and health of the general public,” he said.
Additionally, when inspecting the on-site waste pile, it showed evidence of harvest as it contained stalks and other parts of the plant that were unusable, he said, “indicating that a harvest had been completed,” Silva said.
Coupled with the lack of tracking evidence, this showed that with “that many plants, you should have the finished product to match that. …There was no base product on site that we observed, which is very concerning as well. Because with that many plants, there should be some base product, some finished product to show for it,” he said.
Benally explained that he was initially led to believe that internet service was available, but when the internet company arrived at the site, he was told the farm was too far from Estancia and service was unavailable, making it impossible to use the tracking software. He said he was trying to solve the issue.
The site also posed a hazard to employees as electrical wires were run haphazardly throughout the growing areas, Silva said.
“There were tons of wires running, electrical wires, to grow houses and they weren’t covered or buried,” he said. “It was definitely like a tripping hazard or just a hazard altogether, especially because of the amount of water that was on the ground,” he said.
The bottom line, Sachs said, is the operation should be shut down
“The Division believes that it’s shown, by a preponderance of the evidence, that the Native American Agricultural Development Company has indeed violated the Cannabis Regulation Act,” Sachs said in his closing statement.
Given “that evidence and testimony has shown by preponderance of the evidence that Native American Agricultural Development Company has violated the laws and regulations of New Mexico that undercut the regulated market,” Sachs added. “Given the severity of the violations, the division stands by its initial recommendation and recommends fines for each individual instance of violation found on site, as well as the revocation of the license.”
That would be a devastating financial hit, Benally pointed out.
“These violations can be taken care of, they can be addressed,” he reiterated. “As far as taking away the license, it will be difficult because there is so much money and time involved. [It took] almost two years just to get the license.”
The company faced certain challenges that other, more established growing operations did not, Benally said, adding he was hospitalized and lost oversight control.
“We are a new company,” he said. “Native American-owned, trying to establish ourselves to work with the state and the county. We’re putting in so much money before it can even get off the ground. And with the health issue I had, thank God I recovered, companies are a little more fortunate because in that they have more experience working with the outside (workers), versus myself. I’m Native American and I’m working with non–Natives who are experts at growing. I’ll be truthful, I don’t appreciate some of the racial overtones that have come out from what I had heard. We’re all humans here and we’re trying to make a living, regardless of whether Asian or non-Asian, Navajo or non-Navajo. White, black, Mexican or non-Mexican. We’re all humans.”
Shepherd gave Benally, as well as the state, until Dec. 8 to deliver their interpretations of the findings of fact based on the proceedings. Shepherd said he would provide his ruling after reviewing final submissions from both sides.