Medical marijuana producers seek tax refund worth millions

SANTA FE, N.M. (AP) — A major business in New Mexico’s burgeoning market for marijuana wants the state to refund millions of dollars in taxes that were levied in recent years on sales of medical marijuana but not against most prescription medications.

Integrated cannabis provider Ultra Health said Tuesday that it has asked the state Supreme Court for the opportunity to provide arguments in a legal dispute between another medical marijuana company and the state Taxation and Revenue Department.

New Mexico lawmakers and cannabis regulators made clear this year that a limited personal supply of medical cannabis will be available tax-free starting June 29. The provision is part of legislation signed in April by Gov. Michelle Lujan Grisham to legalize recreational marijuana sales by April 2022 and waive taxes on medical marijuana this year.

“We are very glad the New Mexico Legislature had taken the initiative to include that clause for the deduction,” said Marissa Novel, chief marketing officer at Ultra Health. “What’s still up for debate is years worth of (past) medical cannabis activity.”

In its Supreme Court filing, Ultra Health says it paid nearly $2.7 million in gross receipts taxes in 2020 alone on $39.5 million in sales.

Medical marijuana provider Sacred Health contends that medical marijuana qualifies for a tax deduction as a prescription drug, and won a favorable decision in the New Mexico Court of Appeals last year before legalization reforms were approved.

State taxation officials have asked the state Supreme Court to reverse that decision. They say the Legislature’s decision to waive taxes on medical marijuana sales demonstrates that the tax previously applied.