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Las Cruces store says it’s complying with state cease & desist order on ‘gifting’ cannabis

UPDATE, July 27: An attorney for the Speak Easy store said Tuesday that the Las Cruces business was complying with the state of New Mexico's order to cease and desist 'gifting' cannabis.

“At no time were the management or employees of Speak Easy under the impression they were violating any laws or regulations," wrote Matt Madrid, the company's attorney, in a statement to ABC-7.

Last week, co-owner Jason Estrada said the business is not a dispensary. "We’re a novelty and gift shop," he said.

In an interview Tuesday with ABC-7, the deputy superintendent of New Mexico's Regulation and Licensing Department on accused the business of selling cannabis before they were licensed to do so.

"In order for people to be getting cannabis from the Speak Easy, they are being required to make a purchase," said deputy superintendent John Blair. "There is an exchange of money. There is a transaction and that is not legal.”

Speak Easy's attorney insisted that the guidance on 'gifting' is not clear in the wording of New Mexico's Cannabis Regulation Act. He said the business will comply with the state's order while "all available options are being considered."

“Not only does the NM Act fail to address "gifting" but legal opinions from across the nation support the position that "gifting" is not illegal unless specifically prohibited," wrote Madrid.

UPDATE, July 26: The Cannabis Control Division of the state's Regulation and Licensing Department on Monday served a cease and desist order on 'Speak Easy,' saying the Las Cruces business is violating state law by 'gifting' cannabis in exchange for the purchase of store merchandise.

A copy of the order, obtained by ABC-7, accuses the store of engaging in "a scheme... that constitutes intentional trafficking of cannabis products in violation" of New Mexico's Cannabis Regulation Act.

The co-owner of Speak Easy provided a statement to ABC-7, through his attorney, just prior to being served with the state order.

"The issue is that the NM act does not specifically address the practice that has commonly been called 'gifting' in other states," wrote Matt Madrid, who represents Speak Easy. "Virginia for example, has a section expressly prohibiting the practice while many states where it was not specifically addressed have allowed the practice."

Madrid did say that a section of the state law prohibits giving away cannabis products, but there is also a section that allows for the transfer of products "without financial consideration."

"It is an unsettled area of law not specifically addressed in the NM Act," Madrid wrote.

You can read the entire cease and desist order served by the state on Speak Easy below...

ORIGINAL REPORT, July 23: LAS CRUCES, New Mexico -- You can't buy cannabis yet in New Mexico, but a Las Cruces business will gift customers small amounts of cannabis if they purchase stickers or other merchandise in the store.

"New Mexico is known for growing," said Jason Estrada, the co-owner of Speak Easy in Las Cruces. "If we have the best green thumb when it comes to green chile and red chile, I'm pretty sure we can grow better cannabis here than any other state as well."

Speak Easy officially opened on June 29 when recreational cannabis became legal in New Mexico. It's located in the business complex on 1300 El Paseo Road, near the former Mountain View Market Co-op.

"This is the only thing that's going to change Doña Ana County and get it going in the right direction," Estrada said. "The community response has been unbelievable."

Customers must show an ID to prove they are 21 or older. If they buy a $15 sticker, they are gifted a 1.5 gram cannabis 'sample.' For the purchase of a $50 sticker, customers can receive a 3 gram cannabis 'sample.' With the purchase of a $90 sticker, customers are gifted with a 7 gram cannabis 'sample.'

"We're not a dispensary," Estrada said. "We're a novelty and gift shop."

In the past two months, Estrada said his company has paid $125,000 in payroll. They have sold tens of thousands of dollars worth of merchandise since the store opened its doors.

Speak Easy has 20 employees now, but Estrada plans to hire 40 more on Sept. 1. New employees can expect to make $20 an hour, Estrada said. If you'd like to apply, drop off an application in person at the shop at 1300 El Paseo Road.

Estrada said his operation is 100% legal, but a spokeswoman for the Cannabis Control Division of the New Mexico Regulation and Licensing Department could not confirm that on Friday evening.

Spokeswoman Heather Brewer said the state has been made "aware of the situation" and is looking into the best way to address it. She said the operation is "not in keeping" with the state's reading of the legislative intent of how gifting cannabis should work.

When asked if the operation was legal, Brewer said, "We can't make that determination. We aren't the court system."

Biz/Tech / News / Video

Kate Bieri

Kate Bieri is ABC-7’s New Mexico Mobile Newsroom reporter and co-anchors ABC-7’s weekend evening newscasts.

Jim Parker

Jim Parker is the Director of Digital Content for ABC-7.

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