Judge approves temporary pause on cannabis testing lab’s license

A licensed cannabis testing laboratory accused of transporting marijuana across state lines and falsifying data has been ordered to cease operations — at least temporarily.

A state district judge this month approved a preliminary injunction against Bluebonnet Labs, meaning the business can no longer operate under any of its licenses issued by the New Mexico Regulation and Licensing Department until a formal hearing with state regulators takes place.

Judge Elaine Lujan of the 2nd Judicial District Court also ordered the Cannabis Control Division, under the purview of RLD, to notify all cannabis manufacturers, producers and retailers to cease the sale and distribution of products certified by Bluebonnet Labs, located in Albuquerque.

Jacob Candelaria, an attorney representing Bluebonnet Labs, told the Journal on Friday that the business ceased operations in December and doesn’t admit any fault.

“To our clients, this is really a bad joke. This is completely unfair,” Candelaria said. “It’s mind-boggling how the agency can give approval to a licensee and then turn around and go after them like this.”

The move to halt Bluebonnet Labs’ testing capabilities comes as the Cannabis Control Division has ramped up enforcement in an industry that has been dealt a blow by illicit operators.

Since 2023, the CCD has rapidly increased its enforcement, with the division’s inspectors conducting more than 2,200 inspections as of October, RLD Superintendent Clay Bailey told a legislative committee at the time. For comparison, the CCD conducted 138 inspections in 2022 — the first year of adult-use cannabis sales.

A provision in the law that went into effect in 2023 allows licensing agencies such as RLD to seek preliminary injunctions if licensees engage in activities that pose an immediate threat to public health and safety.

The first business to have a preliminary injunction filed against it was Sawmill Sweetleaf, an Albuquerque-based retailer, in August 2023. The business’ license was revoked by regulators just three months later.

Andrea Brown, a spokesperson with RLD, told the Journal on Friday that the division has filed six injunctions against licensees — one of which was withdrawn following a settlement and another four that were granted by the court. One is still pending, she added.

The division has revoked 12 licenses since April 2022, though none of the licenses it has revoked were for testing labs, Brown said.

Asked if CCD is pursuing a full license revocation against Bluebonnet Labs, Brown declined to comment, citing “the ongoing administrative process with the licensee.”

A notice of contemplated action was initially filed against Bluebonnet Labs in early January, accusing the company of nearly a dozen violations, namely that it was sending certificates of analysis of tested samples from Texas — where it is based — to New Mexico.

Other violations, according to the notice, included the company listing the incorrect address for where cannabis testing was being conducted, not properly documenting sampling and testing information in the state’s track-and-trace system, and changing its testing laboratory processes and instruments without gaining CCD approval.

Besides having to cease operations temporarily, Bluebonnet Labs has to submit to a CCD inspection at its Texas lab within the month, likely to check for traces of New Mexico cannabis material, according to the order.

Candelaria said Bluebonnet Labs tested cannabis for potency at its Albuquerque lab. But he said the business had sent cannabis to be tested for pesticides at its Texas facility, with a former CCD director and division staff giving a “green light” to the deal.

“Our clients with the full knowledge and approval of the CCD shipped samples of cannabis — this is cannabis product typically mixed with some sort of chemical solvent — to be tested for pesticides in Texas,” he said. “Now the agency has gone after my client’s license and their reputation, and their ability to make a living.”

Bluebonnet Labs is one of about half a dozen testing laboratories in New Mexico, according to the Cannabis Control Division. Its listed address, where CCD alleges the company “did not conduct cannabis testing,” is in Albuquerque’s Northeast Heights, near Montgomery and Pennsylvania.

Bluebonnet Labs received its license from the state about two years ago, with company officials touting plans for locations in Albuquerque and Las Cruces.

Dallas-based Bluebonnet’s expansion into New Mexico’s cannabis industry even gained the support of Local Economic Development Act, or LEDA, funds from the state, which had pledged $100,000 to the company in 2022. But a state Economic Development Department spokesperson told the Journal on Friday that the company “never finished the (LEDA) application,” which could have yielded Bluebonnet the funding for its expansion.