Cannabis vs. Feds: New Mexico Businesses Sue Over $1M in Seized Products

Eight New Mexico-based cannabis companies are suing federal agencies, accusing them of violating their constitutional rights through aggressive seizures of state-legal cannabis products. The businesses allege that U.S. Customs and Border Protection (CBP) agents have overstepped their authority by confiscating shipments, vehicles, and personal belongings—causing financial damages exceeding $1 million.

The lawsuit, filed in U.S. District Court in Las Cruces, names the U.S. Department of Homeland Security and CBP as defendants. It accuses federal agents of violating the plaintiffs’ Fifth Amendment rights by summarily seizing cannabis products without due process. The plaintiffs, which include growers and manufacturers from the Las Cruces area, say these actions are derailing their businesses and interfering with New Mexico’s state-regulated cannabis market.

While New Mexico legalized recreational cannabis in 2021, and cannabis sales have since surpassed $1 billion statewide, marijuana remains illegal under federal law. This legal disparity has created a gray area, especially at federal checkpoints set up within 100 miles of the U.S.-Mexico border.

According to the lawsuit, New Mexico is the only border state where CBP regularly seizes state-legal cannabis products. These checkpoints, ostensibly designed to intercept narcotics and verify immigration status, are now sites of escalating confiscations of state-regulated cannabis.

“Unchecked by any oversight or actual prosecution of alleged federal crimes, CBP continues to escalate its campaign to summarily seize and forfeit New Mexico state-legal cannabis product,” the lawsuit states.

The plaintiffs detail instances where drivers transporting cannabis were treated like criminals despite no federal charges being filed. Employees have reportedly been detained under harsh conditions, fingerprinted, and added to federal databases typically used for tracking drug traffickers.

In one incident, a Royal Cannabis employee was stopped at a CBP checkpoint near Alamogordo while transporting $5,992 worth of state-legal cannabis beverages. Federal agents confiscated her personal vehicle, a white Audi Q3, and subjected her to a humiliating search in front of other motorists. She was detained in unsanitary conditions, denied access to her cellphone, and ultimately placed in a locked cell before being released hours later.

No federal charges were filed, but the seized vehicle remains under federal forfeiture proceedings. The employee has yet to receive an official account of the incident, despite requesting documentation and the names of the agents involved.

The lawsuit alleges that the confiscations have caused significant financial harm to the plaintiffs, disrupting their ability to conduct business and comply with state regulations. Damages include lost profits, interrupted operations, and reputational harm, with some businesses facing financial losses so severe they fear closure.

Beyond the individual plaintiffs, the lawsuit highlights a broader issue for New Mexico’s cannabis industry. Gov. Michelle Lujan Grisham has expressed concerns about CBP’s actions, arguing that such enforcement disrupts the state’s regulated market and undermines the economic benefits of legalization.

The plaintiffs are seeking restitution for all seized products, vehicles, and cash—or their wholesale value—as well as a formal process to challenge future seizures. They also want federal agencies to provide transparency by accounting for all confiscated property.

The conflict underscores the challenges faced by cannabis businesses operating in states where marijuana is legal but federal enforcement remains a looming threat. Critics argue that the seizures amount to federal overreach, especially since the U.S. Department of Justice has largely deprioritized prosecuting state-legal cannabis operations.

“Summarily seizing products, cash, and vehicles without providing any process violates federal policy and the constitutional rights of businesses operating legally under state law,” the lawsuit asserts.

The case could set a precedent for how federal agencies handle state-legal cannabis in other jurisdictions. As New Mexico’s cannabis market continues to grow, businesses and regulators alike are watching closely for a resolution that may finally reconcile federal and state cannabis policies.

Should federal agents be allowed to seize state-legal cannabis products at checkpoints?