New Mexico cannabis operators lose federal lawsuit over Border Protection seizures
- Eight licensed New Mexico marijuana companies sued U.S. Customs and Border Protection after agents seized over $1 million worth of legal cannabis, but their lawsuit was dismissed by a federal judge because cannabis remains illegal under federal law.
- Judge Kenneth Gonzales ruled that federal authorities can lawfully seize state-legal marijuana at interior checkpoints within 100 miles of the U.S.-Mexico border, as cannabis is classified as a Schedule 1 controlled substance federally.
- The companies alleged violations of their Fifth and Tenth Amendment rights, but the court found that federal law does not recognize property interests in marijuana, so due-process claims were rejected.
- Despite acknowledging that the companies complied with state law, the court emphasized that its role was to determine the legality of CBP's seizures under federal law, not whether those seizures should have occurred.
Eight licensed New Mexico marijuana companies who sued U.S. Customs and Border Protection after agents seized more than $1 million worth of legal cannabis had their lawsuit dismissed by a federal judge on Monday.
Because cannabis remains an illegal Schedule 1 controlled substance under federal law, federal authorities such as Border Patrol agents can lawfully seize even state-legal marijuana at interior checkpoints, Chief Judge Kenneth Gonzales of the District of New Mexico ruled.
The situation began in February 2024 under the Biden administration when New Mexico cannabis companies, shipping product within the state but within 100 miles of the U.S.-Mexico border, began losing product and cash during CBP stops.
No arrests were made, according to court records.
In two cases, federal authorities also seized vehicles, but returned them after 72 days in one instance and 43 days in the other, according to court records.
After a dozen stops and subsequent seizures – and pressure from Congress to explain – the cannabis companies sued in October 2024, alleging violations of their Fifth and Tenth Amendment due process rights.
Attorneys for CBP and the Department of Homeland Security countered, arguing that cannabis’s status under federal law meant product and cash could be seized.
In a 20-page decision, Gonzales agreed.
“Courts have repeatedly rejected due process claims alleging property rights to or business interests in marijuana,” he wrote in his 20-page decision.
“Because federal law does not recognize property interests in marijuana or marijuana-related activities,” the cannabis companies can’t claim their due-process rights were violated, his decision stated.
However, Gonzales did seem to acknowledge that federal authorities made a choice.
The companies did act “in compliance with state law amid shifting federal enforcement policies,” he wrote.
“Nevertheless, the Court’s purview is limited to determining whether CBP could lawfully seize the cannabis products under current federal law, not whether it should have done so,” he added.
The companies that sued were:
Messages seeking comment from several of the plaintiffs, including Mesilla Valley, were not immediately returned on Tuesday.
Filed in the waning days of the Biden administration, the lawsuit’s status was initially unclear when the second Trump administration began.
In their lawsuit, attorneys for the plaintiffs cited both the 2013 Cole Memo and the more recent proposal to reclassify cannabis as a Schedule 3 drug.
But neither marijuana rescheduling, which has yet to be finalized, nor the since-rescinded nonbinding memo “alter federal law,” Gonzales wrote.
“Indeed, Congress has decreed explicitly that Schedule I controlled substances are ‘deemed contraband and seized and summarily forfeited to the United States,’” he wrote.
“Marijuana remains contraband under federal law notwithstanding evolving enforcement policies or prospective regulatory changes.”
With no license caps and with customers drawn from nearby Texas, New Mexico cannabis operators enjoyed an initial boom.
But with more than 3,000 licensed operators competing for about $40 million in monthly sales, economic pressures may have compelled operators to run the risk of Border Protection seizures, MJBizDaily reported.
CBP has jurisdiction over areas within 100 miles of an international border.
The permanent Border Protection checkpoints in New Mexico were a known hazard when the state legalized adult-use marijuana in 2021.
The next year, the American Civil Liberties Union of New Mexico warned that the presence of federal law enforcement in New Mexico threatened a “disastrous impact” on the state’s regulated marijuana industry.
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Some companies deliberately located both cultivation and retail to avoid Border Protection, operators told MJBizDaily.
It’s unclear whether the cannabis seizures continued after Trump took office.
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.