July 27, 2021

Jason Estrada
Speak Easy LC LLC
1300 El Paso Road
Las Cruces, NM 88001

Kayla Martinez
Registered Agent
Speak Easy LC LLC
1450 Monte Vista Ave
Las Cruces, NM 88001

Matt Madrid
Law Offices of Matt Madrid
135 W. Griggs Ave
Las Cruces, NM 88001

ORDER TO CEASE AND DESIST VIOLATION OF NEW MEXICO LAW

Pursuant to the Cannabis Regulation Act (CRA), the Cannabis Control Division

(CCD) of the New Mexico Regulation and Licensing Department (RLD) is responsible for

the administration of the CRA and the licensing provisions of the Lynn and Erin

Compassionate Use Act (LECUA) and rules promulgated in accordance with those acts.

See § 26-2C-2 NMSA 1978 (2021). The Superintendent of the RLD (Superintendent) is

responsible for the operation of the RLD. It is the Superintendent’s duty to manage all

operations of the RLD and to administer and enforce the laws which the

Superintendent, the RLD, or a division of the RLD is charged, which includes

responsibility for the CCD and administration of the CRA. See § 9-16-6 (B)(5) NMSA
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1978 (2021). Upon review and consideration of the relevant facts and law available, the

Superintendent hereby asserts the following:

I. FACTUAL BACKGROUND

a. On or about July 16, 2021, staff members of the CCD received

information including allegations that persons working at a retail business identified as

“Speak Easy LC LLC” (Speak Easy) located in Las Cruces, New Mexico, were engaging in

an attempt to circumvent the requirements of the CRA and the LECUA by a scheme

where an individual would be “gifted” a quantity of cannabis upon the person having

first made a purchase of some other product offered for sale by Speak Easy.

b. Following up on the information provided, staff of the CCD conducted a

query of internet and social media sites related to Speak Easy, including a Facebook

page appearing to officially represent the Speak Easy business. Based on content found

on the page, staff were able to preliminarily confirm the alleged conduct of the business

(and business employees) related to “gifting” cannabis/cannabis products to patrons of

Speak Easy.

c. CCD staff members confirmed the principal business location of Speak

Easy as 1300 El Paso Road, Las Cruces, Doña Ana County, New Mexico, 88001. From the

Corporations Division website for the New Mexico Secretary of State’s Office, it was

determined that Speak Easy LC LLC, Business ID# 6480187, is registered as a domestic

limited liability company, with a stated business purpose of being a “Novelty and Gift

Store”. The recorded Organizer of the company is Jason Estrada, the Registered Agent is
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Kayla Martinez, and the mailing and contact addresses for each is listed as 1450 Monte

Vista Ave, Las Cruces, New Mexico, 88001. [See RLD Exhibit #4, attached.]

d. On July 20, 2021, Deputy Director Robert Sachs and Acting Deputy

Director Nicole Bazanno of the CCD traveled to the primary business location of Speak

Easy and personally observed the business location and operation of the business. On

that date, Deputy Director Sachs and Acting Deputy Director Bazanno made direct

contact with Jason Estrada and Joseph Garza, who identified themselves as the co-

owners of Speak Easy.

e. During the meeting, Mr. Estrada and Mr. Garza were asked to explain the

operations of Speak Easy in regard to providing cannabis products to members of the

public. Mr. Estrada and Mr. Garza described to the CCD staff members an operational

process where the company (Speak Easy) knowingly and intentionally engages in the

“gifting industry” by providing “gifts” of cannabis products to customers of Speak Easy

who make purchases of other items from the business.

f. In summary, Mr. Estrada and Mr. Garza stated that customers will come

into Speak Easy and buy non-cannabis products, and those customers are then offered a

“gift” of a cannabis product. Mr. Estrada and Mr. Garza stated that they keep no more

than two (2) ounces of cannabis at the Speak Easy store at a time, and if they run out of

cannabis for “gifting” to customers, they will go to their homes to obtain more cannabis

to bring back to the store.

g. In the course of the meeting on July 20, 2021, at the Speak Easy facility,

CCD Deputy Director Sachs informed Mr. Estrada and Mr. Garza that they, and Speak
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Easy, appeared to be violating the trafficking provision of the CRA, found at § 26-2C-28

NMSA 1978. Deputy Director Sachs further explained that the “gifting” of cannabis

products, as described by Mr. Estrada and Mr. Garza could result in a felony conviction

and that such a conviction could result in their being ineligible for future licensure under

the CRA. Deputy Director Sachs recommended that Mr. Estrada and Mr. Garza consult

their attorney regarding this matter. Mr. Estrada and Mr. Garza acknowledged they

were aware of the trafficking provision of the CRA, and contended they were confident

they and their business are not violating the law. Deputy Director Sachs provided Mr.

Estrada and Mr. Garza with photocopies from New Mexico 2021 Special Session House

Bill 2, Section 2 (“Definitions”) [now § 26-2C-2 NMSA 1978], Section 25 (“Personal Use of

Cannabis”) [now § 26-2C-25 NMSA 1978] and Section 28 (“Unlicensed Sales of

Cannabis – Penalties”) [now § 26-2C-28 NMSA 1978] of the CRA for their review.

h. Mr. Estrada and Mr. Garza asserted that their actions of “gifting”

cannabis products to customers of Speak Easy were lawful, and further that a “legal

opinion” had been obtained from an attorney assuring them that the “gifting” of

cannabis products is legal. Mr. Estrada and Mr. Garza further stated that they had

previously distributed copies of the legal opinion to local law enforcement agencies

concerning the legality of the cannabis product “gifting” activities engaged in by Speak

Easy (and staff).

i. The purported attorney legal opinion was not shown or provided to

Deputy Director Sachs or Acting Deputy Director Bazanno, nor was the name of the

attorney who drafted such opinion revealed at that time. However, Acting Deputy
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Director Bazanno subsequently received an email from Haily Shae, on behalf of Speak

Easy, identifying attorney Mark Madrid, of Las Cruces, as legal counsel for Speak Easy.

j. During the course of the meeting on July 20, 2021, Mr. Estrada and Mr.

Garza freely admitted to providing cannabis products to customers of Speak Easy as

“gifts” and argued they had broken no laws by making such “gifts.” Mr. Estrada and Mr.

Garza argued that “gifting” of cannabis products in New Mexico is legal because it is

legal in other states.

k. During the course of the meeting on July 20, 2021, Mr. Estrada and Mr.

Garza did not offer information or explain where the cannabis products at Speak Easy

originated from or how those products were acquired.

l. The CRA requires all cannabis products to be produced and manufactured

from within New Mexico. See § 26-2C-37 NMSA 1978. However, photos of products

from Speak Easy’s social media contain images of cannabis products that have packaging

labels reflecting the cannabis products were packaged in the State of California. [See

RLD Exhibit # 1 – A and 1 - B, attached.]

m. On or about July 23, 2021, Mr. Estrada was interviewed on camera by

reporter Kate Bieri from KVIA ABC-7 a television news station located in El Paso, Texas.

Within the televised report of that interview, which aired July 23, 2021. The reported

description of how Speak Easy “gifts” cannabis products to customers of the business

was a follows: When a customer of Speak Easy makes a purchase of some item offered

for sale by the business (such as a small sticker) the customer is then offered a defined

quantity of cannabis product as a “gift” by an employee of Speak Easy. Apparently, the

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quantity of cannabis product offered as a “gift” is directly tied to the dollar amount of

purchase made by the customer. The example provided in the news story was the

purchase of “sticker” for the price of ten dollars ($10), which resulted in the reporter

being “gifted” a cannabis cigarette containing one (1) gram of cannabis. From the

reporter’s description, larger dollar value purchases from the business will result in an

increased quantity of cannabis provided to the customer. Based on the dollar value of

the purchase made by the customer, the quantity of cannabis product “gifted” will

increase proportionately. Thus, the value of the cannabis product being “gifted” is

directly tied to a specific amount of financial consideration to be paid by the customer

to Speak Easy. As was detailed by the reporter in the KVIA ABC-7 news story, based on

the price of the “stickers,” or other non-cannabis items for sale at Speak Easy, a

customer can choose how much the customer wishes to spend and then receive “gifts”

of cannabis products from Speak Easy proportionately corresponding to the dollar

amount of purchases made. [See RLD Exhibit #2, attached.]

n. Additional media stories have been published by other media outlets in

the Las Cruces, New Mexico, area likewise recounting the “gifting” of cannabis products

by Speak Easy to involve a purchase being made by a customer and the quantity of the

“gift” of cannabis products provided by Speak Easy being tied to the dollar value of the

purchase made by the customer. [See RLD Exhibit 3, attached.]

o. Speak Easy LC LLC is not licensed as a cannabis retailer under the CRA or

as a medical cannabis dispensary under the LECUA. Likewise, neither Jason Estrada nor
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Joseph Garza are licensed as cannabis retailers under the CRA or as medical cannabis

dispensers under the LECUA.

II. STATUTORY GROUNDS FOR ACTION

a. The CCD is created to “administer the Cannabis Regulation Act and the

licensing provisions of the Lynn and Erin Compassionate Use Act [Chapter 26, Article 2B

NMSA 1978] and rules promulgated in accordance with those acts.” § 26-2C-3 (A)

NMSA 1978.

b. The CCD “shall regulate and administer and may collect fees in

connection with the administration of: (1) commercial cannabis activity and licensing

related to commercial cannabis activity.” § 26-2C-6 (A) NMSA 1978.

c. Pursuant to the CRA, “cannabis product” is defined at § 26-2C-2(K) NMSA

1978 as meaning “a product that is or that contains cannabis or cannabis extract,

including edible or topical products that may also contain other ingredients”.

d. Pursuant to the CRA, “cannabis retailer” is defined at § 26-2C-2 (M)

NMSA 1978 as meaning “a person that sells cannabis products to qualified patients,

primary caregivers or reciprocal participants or directly to consumers”.

e. Pursuant to the CRA at § 26-2C-2 (RR) NMSA 1978 "retail establishment"

means a location at which cannabis products are sold to qualified patients, primary

caregivers and reciprocal participants and directly to consumers”.

f. Pursuant to the CRA at § 26-2C-28 NMSA 1978, the unlicensed sale of

cannabis is defined along with related criminal penalties and includes the following:

“A. As used in this section, "traffic" means the:

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(1) distribution, sale, barter or giving away of cannabis products; or

(2) possession with intent to distribute, sell, barter or give away
cannabis products.
B. Unless otherwise provided in the Cannabis Regulation Act or the Lynn
and Erin Compassionate Use Act [Chapter 26, Article 2B NMSA 1978], it is
unlawful for a person without a license to intentionally traffic cannabis products.
...
D. Except as otherwise provided in [26-2C-14 NMSA 1978] of the
Cannabis Regulation Act, a person eighteen years of age or older who violates
Subsection B of this section is guilty of a misdemeanor and shall be sentenced
pursuant to the provisions of Section 31-19-1 NMSA 1978.
E. A person eighteen years of age or older who violates Subsection B of
this section and who conducts unlicensed cannabis product sales from a building,
room or other area open to the public in a manner that would lead a reasonable
person to believe that the area is a cannabis establishment licensed pursuant to
the Cannabis Regulation Act is guilty of a fourth degree felony and shall be
sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.”

g. The CCD has not yet permitted the sale of commercial cannabis products.

See § 26-2C-6(K) (“The division shall determine when retail sales of commercial cannabis

products begin[.]”).

h. § 26-2C-25, detailing “personal use of cannabis,” only permits

“transferring, without financial consideration, to a person who is twenty-one years of

age or older not more than the amount of cannabis lawfully purchased and obtained

pursuant to the [CRA] or the [LECUA].” (Emphasis added).

i. “Financial consideration” is defined as “value that is given or received,

directly or indirectly, through sales, barter, trade, fees, charges, dues, contributions or

donations”. § 26-2C-2(BB) NMSA 1978 (emphasis added).

j. The CRA currently requires that all cannabis products shall be derived

from a source originating within New Mexico. § 26-2C-37 NMSA 1978.

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k. Protections afforded to licensees under the Cannabis Regulation Act

(CRA), as provided by §26-2C-13 NMSA 1978, clearly extend only to persons licensed

under the CRA or the LECUA.

III. CONCLUSIONS BASED ON THE EVIDENCE AND LAW

a. By open admission of the co-owners of Speak Easy LC LLC, Jason Estrada

and Joseph Garza, the business has knowingly and repeatedly engaged in conduct that

constitutes intentional trafficking of cannabis products in violation of § 26-2C-28 NMSA

1978, “Unlicensed Sales of Cannabis; Penalties” through the “distribution, sale, barter or

giving away of cannabis products” while unlicensed under the CRA or LECUA to engage

in such conduct.

b. Such violations of law have been documented not only through the

admissions of Mr. Estrada and Mr. Garza, but via media news accounts, including those

included in RLD Exhibit #2 and RLD Exhibit #3.

c. It is anticipated that the owners of Speak Easy will argue that they have

not violated the CRA due to the provision found at §26-2C-25(A)(3) NMSA 1978 which

provides it is unlawful for a person who is twenty-one years of age or older to transfer

“without financial consideration, to a person who is twenty-one years of age or older

not more than the amount of cannabis lawfully purchased and obtained pursuant to the

Cannabis Regulation Act or the medical cannabis program.”

d. Any defense based on § 26-2C-25(A)(3) NMSA 1978 in this case will

undoubtedly fail based on the clear evidence that a customer of Speak Easy must make

a non-cannabis purchase from the business prior to being “gifted” a defined quantity of
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cannabis product. The quantity of the “gift” cannabis is directly bound to the dollar

value of the non-cannabis product purchased, thus, “financial consideration” (i.e.

monetary value) has been established for each cannabis product being distributed by

Speak Easy. Additionally, the very nature of the products offered for sale by Speak Easy,

such as small “stickers” priced at amounts such as ten ($10), fifteen ($15) or more

dollars makes clear the intentional deception engaged in by Speak Easy as the intrinsic

value of the non-cannabis item being purchased by the customer is obviously far below

the price being charged by the business. Speak Easy clearly sets a monetary price for

the cannabis products being distributed and only undertakes the pretense of “gifting” to

disguise the actual sale of cannabis products as an unlicensed cannabis retail

establishment.

e. Based on the nature of the facts and evidence gathered through

investigation by the CCD, and in consideration of the relevant law controlling this

matter, as established above, sufficient cause has been established to justify the

Superintendent issuing an Order to Cease and Desist the unlawful trafficking of cannabis

products by Speak Easy LC LLC and any owners, officers or employees of Speak Easy LC

LLC who do not hold a current and valid license for the retail of cannabis products under

the CRA or to dispense medical cannabis under the LECUA.

IV. ORDER TO CEASE AND DESIST VIOLATION OF LAW

IT IS THEREFORE ORDERED:

1. Speak Easy LC LLC, and all owners, officers and employees thereof, shall
immediately CEASE AND DESIST selling or otherwise providing cannabis
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products to customers of Speak Easy LC LLC in violation of the Cannabis

Regulation Act and any other applicable New Mexico law;
2. Speak Easy LC LLC shall immediately CEASE AND DESIST all actions of providing
cannabis products to customers of Speak Easy LC LLC, whether by “gift” or
otherwise, in any manner connected to the operation of the Speak Easy LC LLC
business where cannabis is provided to a customer of the business upon the
customer having completed any purchase of other goods, or following any other
payment or donation of monetary value to Speak Easy LC LLC or any owner,
officer or employee of Speak Easy LC LLC;
3. Failure to comply with this order to cease and desist will result in the CCD taking
additional enforcement action including referral of this matter for enforcement
through the criminal justice system.

IT IS SO ORDERED.
Linda M Digitally signed by Linda M Trujillo
DN: cn=Linda M Trujillo, o=NM Regulation
and Licensing Department, ou,

Trujillo email=linda.trujillo3@state.nm.us, c=US

_______________________________
Date: 2021.07.26 16:43:27 -06'00'
__________
7/27/2021
Linda M. Trujillo Date
Superintendent
Regulation and Licensing Department

V. NOTICE OF ADMINISTRATIVE RIGHTS

a. While this Cease and Desist Order does not impose a penalty, the

Superintendent may proceed with a formal disciplinary action pursuant to the authority under

the Uniform Licensing Act to regulate unlicensed activity. See §61-1-3.2 (providing for civil

penalties of up to $1,000 per instance plus costs for unlicensed persons engaged in a regulated

profession or occupation).

b. If such action is initiated with the issuance of a Notice of Contemplated

Action, a person aggrieved by such action may request and receive a hearing with the

Superintendent for the purpose of reviewing the action in accordance with the Uniform
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Licensing Act before such action and any penalty becomes final. See §26-2C-8(E) NMSA

1978 and §61-1-1 NMSA 1978 et seq.

c. Any person aggrieved by a final order of the Superintendent may appeal

to the District Court pursuant to the provisions of § 39-3-1.1 NMSA 1978 and NMAC 1-

075.

VI. CERTIFICATE OF SERVICE

I hereby certify that on the date of July 27, 2021, I caused a true and correct copy of the
above and foregoing ORDER TO CEASE AND DESIST to be sent via certified mail, return
receipt requested, to the following individuals at the addresses listed below:

Kayla Martinez
Registered Agent
Speak Easy LC LLC
1450 Monte Vista Ave
Las Cruces, NM 88001

Matt Madrid
Law Offices of Matt Madrid
135 W. Griggs Ave
Las Cruces, NM 88001

I further hereby certify that on July 27, 2021, I caused a true and correct copy of the
above and foregoing ORDER TO CEASE AND DESIST to be sent via electronic mail to the
following individuals/addresses:

Jason Estrada (via Haily Shae)

prosperfarmsnm@gmail.com

Matt Madrid
matt@mattmadrid.com

_________________________________
Kevin A. Graham
Deputy General Counsel
Regulation and Licensing Department
2550 Cerrillos Road
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Santa Fe, NM 87505

(505) 476-4562
Kevin.graham@state.nm.us

CC: NM DPS
Las Cruces PD, Chief
Doña Ana County Sheriff
DEA
NM US Attorney Office