DESPITE PRAISE AS SUCCESS, SOME SAY N.M. MEDICAL CANNABIS PROGRAM NEEDS WORK

Four years after New Mexico's Medical Cannabis Program was created,
nearly 4,000 New Mexico residents have been approved to use the herb
as medicine, and 25 nonprofit producers have been licensed to sell it
to them.

New Mexico's system for regulating those producers is being adopted by
other states as a model for allowing medicinal use of marijuana
without seeing pot dispensaries pop up on every street corner, as they
have in California and Colorado.

The program has produced some spinoff businesses and is generating
hundreds of thousands of dollars worth of tax revenue from the sale of
medical marijuana. And this year, for the first time, the state
coffers will see an influx of cash from fees paid by producers.

But program participants and patient advocates say the system still
needs tweaking and fear it could be canceled if Gov. Susana Martinez
follows through on statements she made during her campaign that she
would like to see the medical marijuana law repealed.

The program

New Mexico, which is perpetually on the bottom of "best" lists and the
top of "worst" lists, has been thrust into the unfamiliar role of
being an example for other states on how best to regulate medical marijuana.

Some states that passed laws allowing people to legally buy it did not
address the question of where. That led to a myriad of unregulated
dispensaries and conflicting local laws that some say have put the
states at risk of attention from federal drug-enforcement agents.

New Mexico's law requires the state to license nonprofit producers of
the drug so patients can purchase it from legal sources. Patients also
are allowed to grow their own - up to 12 seedlings and four mature
plants.

"It definitely is a model," Tamar Todd, a staff attorney for the Drug
Policy Alliance, said of New Mexico's program. "New Mexico is the
first state that took on the business of licensing production. At the
time, that was a radical notion. And once New Mexico jumped out and
did that, other states started looking at and copying what New Mexico
did."

Todd said some states - such as Maine, Vermont and Colorado - that
already had medical marijuana laws allowing patients to grow their own
marijuana have amended their laws to create regulated distribution
patterned after New Mexico's.

She said other states, such as New Jersey, "that didn't like the idea
of home grow because it seemed out of control" also adopted
distribution systems similar to New Mexico's that don't include the
do-it-yourself option.

Todd said the combination of grow-your-own and state-regulated
dispensaries is the ideal scenario for patients.

"Many patients who are sick are physically unable to grow their own,"
she said, adding that having state-regulated facilities also provides
a level of quality assurance and reliability that doesn't exist in
states like California, where cooperatives and dispensaries are
largely unregulated.

"New Mexico's law gives patients the best options for access," she
said. Todd noted that New Mexico does not have a system of testing the
quality of marijuana, but the fact that the producers must be licensed
by the state provides more assurance for patients than buying from
unregulated sources. Todd said some other states do require testing,
and some of the better dispensaries in California have self-imposed
quality requirements.

Catherine Torres, secretary of the state Department of Health, said
Thursday that her department plans to issue a request for proposals
for a testing system.

Len Goodman, director of New MexiCann Natural Medicine, one of the
largest of the state's producers, said he is close to creating a
testing protocol, but one stumbling block is the fact that his
employees are not authorized to provide marijuana samples to anyone
who does not have a medical marijuana card, including lab workers.

The profits

According to the most recent data available from the state Department
of Health, licensed producers of medical marijuana sold $744,079 worth
of the herb in the second quarter (April, May and June) of 2011,
generating $55,938 worth of gross-receipts tax revenue for the state.

Department data also indicate that workers employed by the medical
marijuana producers were paid $327,715 in wages during the same time
period.

New businesses are beginning to spring up around the medical marijuana
industry as well.

One such business is the Three Thumbs Inc. School for Horticulture of
Medical Cannabis. The school holds weekly classes at two Albuquerque
locations and teaches card-carrying patients how to get the maximum
yield from their plants and how to time their growth to achieve a
state of "perpetual harvest," so they'll always have enough medicine.

Founder Dominic Velasquez, 34, said he grew up in a family of farmers
in Vermont and has been studying plants and trees all his life. A
medical marijuana patient himself - he has been diagnosed with
post-traumatic stress disorder and chronic pain from being run over by
a car in 2009 - Velasquez uses the plants he is authorized to grow to
show others how it's done.

The nonprofit's classes cover every aspect of indoor and outdoor
marijuana growing, including growing from seed, cloning plants,
controlling pests and providing oxygen to plants that are grown inside.

Velasquez even makes house calls. Recently, he was demonstrating how
to clone plants to an 18-year-old woman who was approved for medical
marijuana use for PTSD after witnessing her brother kill their father.

"The beauty of it is, we educate them enough so that they don't have
to buy a $300 bag of medicine every month," Velasquez said. "They can
spend $200 in six months on electricity and produce enough for
themselves, 6 ounces at a time."

The school also teaches patients who don't want to smoke their
medicine how to break it down into coconut oil and cook with it.

Velasquez said some of his students pay, but many can't. "I feel
really good when these people are harvesting for themselves," he said.

Peace Medical Marijuana Consultants, founded by Robert Davis, is
another Albuquerque-based business that opened to support patients of
the medical marijuana program.

Davis, 33, said he became involved in the industry after a prison
doctor wrote to him to tell him that his mother, who was incarcerated
and HIV-positive, would live a lot longer if she were able to use
medical marijuana instead of prescription drugs. Davis tried in vain
to obtain the medicine for his mother. "I went to the Department of
Health and said, 'I need to get my mom on this program to help her
live longer.' They told me they couldn't help me. There were no
doctors, nothing," he said.

Davis was not able to help his mother because cannabis is not allowed
in correctional facilities. But after researching the doctors and
procedures for qualifying for the program, he decided to help others
who needed the medicine but didn't know how to go about becoming
enrolled in the program.

"I took the money from my own account to start [the business], and it
took off," he said. "After a year and a half, I had to quit my job at
Home Depot." Davis now has an office where he and his staff walk
patients through the process, helping them fill out forms and find
doctors.

"We have a registration station where you can use our computers, and
our secretaries will help you, and we direct you to producers that
have medication," he said. The business also employs a part-time nurse
practitioner who is authorized, after reviewing patients' medical
records, to certify that they have one of the qualifying conditions
for the program.

If the patients haven't been to a doctor because they don't have money
or live in a rural area, Davis said, he can arrange appointments for
them to be correctly diagnosed.

He charges $40 to help people file an application and said he has
assisted about 1,500 people so far.

"I see a lot of military," he said, "a lot of vets with PTSD and
chronic pain. The majority of my customers I would say are over 40
years old. I'm 33, and if someone comes in and they are younger than
me, I really scrutinize them. But a lot of people have these
conditions, and it's really bad. You don't want to be a 22-year-old
with Crohn's disease."

For Davis, "The coolest thing is when you see patients coming in their
first year in the program, sniffing, with a runny nose and skinny, and
after a year they come in to re-certify, and they have put on weight
and are doing a lot better. That's when you know what you are doing
matters."

The problems

While New Mexico's medical marijuana program is a model for other
states, it has experienced growing pains. In the first couple of
years, demand outpaced supply, and patients complained that the
Department of Health wasn't approving new producers fast enough.

In December 2010, the department approved eight new producers,
bringing the total number across the state to 25, and upped the number
of plants they could grow from 95 to 150.

Goodman said those changes do seem to have solved the supply
problem.

"And we got better at what we were doing," he said. "We have more than
doubled our production capabilities. We used to sell out in a day. Now
we are almost never 'out.' "

Last April, six would-be medical marijuana producers filed suit,
alleging that the department's process for approving growers is
arbitrary and unfair. And slow - currently, 85 nonprofits have
applications pending.

And numerous patients have complained that they have had trouble
renewing their medical cannabis identification cards.

Even those with chronic and serious health issues such as HIV and
cancer are required to renew each year, which means paying another
fee, filling out another form and providing medical documentation to
prove they still have a qualifying condition.

Without a valid card, patients can't obtain marijuana from a producer
and are vulnerable to prosecution for using or possessing marijuana.

Health Secretary Torres said she couldn't say how long the average
wait time was for patients who are trying to obtain or renew a card
because each case is different. According to data provided by the
department's spokeswoman, Aimee Barabe, "There are roughly 1,000
applications that we cannot process without further information. We
are contacting patients to inform them of what information is needed."

Part of the problem is that the bill that created the program did not
appropriate money for operations. For most of its existence, the
program has not had its own staff or budget, relying instead on staff
time and money borrowed from other programs within the department.

Callers who dial the number for the program are greeted by a
voice-mail message telling them it could be 30 days before their calls
are returned. Torres said she is working to address some of these
problems and plans to hire seven new employees for the program.

By the end of this year, the program will be generating some new
revenue for the state. Last December, former Health Secretary Alfredo
Vigil oversaw the creation of new rules requiring producers to pay
annual fees ranging from $5,000 to $20,000, depending on their time in
business.

Torres said the department expects to collect $300,000 when those fees
become due in December. But, she said, as of now, the program is only
allowed to collect the money, not spend it, so the money will go into
the state general fund.

She said she plans to introduce legislation in January 2012 that would
allocate those funds for the medical cannabis program.