Ramona Franco watched with worry in 2024 as California Gov. Gavin Newsom banned intoxicating hemp products under emergency regulations in the Golden State.
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Franco lives in Chimayó, where she helps operate a small hemp growing and manufacturing business, but said she has friends affected by the California law.
Chimayo Hemp Enterprises cultivates 1 to 3 acres of hemp each year on a small farm in the Northern New Mexico community and has a nearby manufacturing center. It follows federal guidelines when making products containing CBD — a nonpsychoactive chemical in cannabis and hemp — including smokable hemp flower and dog treats, Franco said. But it has steered clear of the largely unregulated market for hemp products containing the psychoactive chemical THC, which has fueled concerns in New Mexico and across the nation.
Products such as gummies and other edibles containing the often synthetic hemp-derived THC are sold legally in gas stations and smoke shops in many states, including New Mexico, thanks to a federal farm bill loophole.
“We kind of knew from the beginning it was going to go south,” Franco said of such products. “We chose not to ever get into the game.”
Members of the state-regulated cannabis industry in New Mexico are decrying the market for hemp-derived THC products, with the New Mexico Cannabis Chamber of Commerce planning to push for a ban and the state’s largest cannabis company taking its own actions in an effort to spur more oversight.
“As an organization, we’re very concerned. It’s one of our 2025 priorities — to ban intoxicating hemp in New Mexico, either legislatively or through an executive order,” said Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce.
State Rep. Andrea Romero, D-Santa Fe, said she plans to introduce a bill in the upcoming session that would ban hemp-derived delta-8 THC. “There is a plan to abolish delta-8 essentially from circulation. It’s an all-out ban,” she said.
The proposed legislation wouldn’t affect businesses like Chimayo Hemp Enterprises, which grows 600 to 900 plants a year and only markets products containing CBD, according to Franco.
“As far as we’re concerned,” she said, “we stick with the medicinal qualities of the plant and make our products for medicinal reasons.”
‘A cancer on the legal cannabis market’
Hemp-derived THC, known for getting users high, is not regulated under the same standards as cannabis, and products often contain levels of THC over the legal limit for cannabis products in New Mexico, said Duke Rodriguez, CEO of Ultra Health, which operates 29 cannabis dispensaries as well as massive facilities for growing and processing products.
Rodriguez believes the hemp products pose a threat to the state-legal cannabis industry as well as public health concerns.
“There are these products that have infiltrated New Mexico and other states. You can go to a gas station, connivence store, smoke shops. I myself went to witness it to see if it is real,” he said.
In a recent letter addressed to state Cannabis Control Division officials, urging the agency to focus on what Ultra Health describes as an “emerging crisis,” the company wrote: “If the Division does not begin to address this parasite quickly, it will metastasize into a cancer on the legal cannabis market.”
Rodriguez said his company has been testing some products sold in the unregulated hemp market and has found they exceed the legal limit of delta-9 THC — which usually occurs naturally at higher concentrations in cannabis.
The federal loophole for hemp products came about in 2018 when that year’s farm bill legalized hemp, a botanical class of cannabis with less than 0.3% THC. This has allowed a multibillion-dollar industry to materialize nationwide without many rules and regulations. Although, a growing number of states have sought to close this loophole by imposing state bans or restrictions.
Seventeen states have banned hemp-derived products, according to the New Mexico Cannabis Chamber of Commerce.
Intoxicating hemp derivatives known as delta-8 THC and delta-10 THC have become popular, Politico reported this year, with some hemp companies finding it is possible to get enough delta-9 THC in a beverage or edible product to have psychoactive effects without breaking the guidelines of the 2018 law.
Testing of ‘quasi-cannabis’ products
State-regulated cannabis retailers in New Mexico say they face headwinds due to the still-thriving illicit cannabis trade and an explosion of storefront dispensaries in Santa Fe and Albuquerque since recreational use was legalized in 2022.
Rodriguez estimates hemp-derived products would have about 25% of the retail cannabis market in New Mexico if they were sold as regulated cannabis, something that concerns him.
“It’s embarrassing that New Mexico, and particularly the Cannabis Control Division and the [Regulation and Licensing Department], have not paid adequate attention to this problem that’s plaguing many states,” he said. “... It’s being sold every day as though it’s safe when in fact it’s most likely that it, statutorily, would be defined as cannabis.”
A spokesperson for the Cannabis Control Division wrote in an email the agency does not have the authority to oversee or enforce regulations related to hemp-derived products. “Regulation and enforcement related to hemp-derived products falls under the purview of the New Mexico Environment Department,” Andrea Brown wrote.
Rodriguez said he and other Ultra Health representatives recently visited a variety of smoke shops and gas stations in Albuquerque looking for “quasi-cannabis” products. They purchased some of the products and took them to the Rio Grande Analytics laboratory in Albuquerque for testing.
The lab found many of the products contained a delta-9 THC concentration of more than 0.3%, the legal limit, Rodriguez said.
Ultra Health is preparing to sue some of the manufacturers of hemp-derived products, he added.
“You will see that [these products] have markings on the outside and they use phrases like ‘hemp-derived,” ‘delta-8,’ ‘intoxicating hemp’ and then they’ll say ‘not delta-9,’ ‘not THC.’ But when you send them to the lab, you find out the story is completely different,” Rodriguez said.
According to the U.S. Food and Drug Administration, the natural amount of delta-8 THC in hemp is very low, and thus additional chemicals are needed to convert other cannabinoids in hemp, like CBD, into delta-8 THC.
Lewinger says the lack of regulations on hemp-derived products are concerning.
“We don’t really understand the long-term effects of hemp-derived THC analogues,” he said. “Part of the problem is what you can buy in smoke shops as hemp-derived, it doesn’t face the same testing requirements that cannabis in our cannabis program faces.”
He added, “Because of the nature of how it’s made, you need a lot more hemp to create the same amount of extract. The stuff that has been tested has really high levels of pesticides, really high levels of heavy metals.”
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