New Mexico Medical Cannabis Producers Seek Millions in Tax Refunds
As the longstanding effort toward the legalization of cannabis finally saw progress this year, a major cannabis business, with more than two dozen medical dispensaries in New Mexico, wants the state to refund millions of dollars in taxes. The reason? They say the money was levied in recent years around the sale of cannabis but not against most prescription medications.
Ultra Health is an integrated cannabis provider in New Mexico and said that it has asked the state Supreme Court for the opportunity to provide arguments in a legal dispute between another medical cannabis company and the New Mexico Taxation and Revenue Department.
State lawmakers and cannabis regulators said earlier this year that there would be a limited personal supply of medical cannabis available, tax-free, starting June 29. The provision comes as part of the legislation signed in April by Governor Michelle Lujan Grisham to legalize adult-use cannabis sales by April 2022, and additionally waive the taxes of medical cannabis this year.
While this is positive in the cannabis industry, it’s also part of what brought Ultra Health to address the conversation with the state Supreme Court.
“We are very glad the New Mexico Legislature had taken the initiative to include that clause for the deduction,” said Marissa Novel, chief marketing officer at Ultra Health. “What’s still up for debate is years’ worth of (past) medical cannabis activity.”
Ultra Health is also making moves this year to coincide with the changes in the state, announcing recently they are spending more than $20 million to expand in anticipation of the state’s future recreational cannabis market. Ultra Health CEO and President Duke Rodriguez said the expansion is part of an effort to meet the upcoming demands of medical and recreational cannabis consumers going forward.
The company says, by the year’s end, it will have a retail presence in 28 of New Mexico’s 33 counties.
In their Supreme Court filing, Ultra Health said it paid upwards of $2.7 million in gross receipts, for 2020 alone, in taxes on $38.5 million in sales.
Another medical cannabis provider, Sacred Health, said that medical cannabis should qualify for a tax deduction as a prescription drug, and won a favorable decision in the New Mexico Court of Appeals last year prior to the approval of legalization reforms.
State taxation officials have since asked the Supreme Court to reverse that decision, saying the Legislature’s decision to waive taxes on medical cannabis sales show that the tax previously applied.