SANTA FE — New Mexico’s tax company could be on the hook for additional than $24 million in reimbursement payments to clinical cannabis producers, after the Supreme Courtroom dominated Tuesday it would not hear an attraction of a decrease court docket ruling.

At challenge in the prolonged-jogging situation is regardless of whether professional medical hashish producers can declare a point out gross receipts tax deduction for prescription treatment.

While a 2021 law legalizing recreational hashish for grownup users in New Mexico designed health-related marijuana product sales exempt from taxation going forward, the court circumstance bargains with tax deduction claims denied by the condition Taxation and Profits Section that date back again to 2014.

An company spokesman explained Tuesday the tax department was nevertheless performing on pinning down an updated expense estimate, but would approach refund statements as they are submitted.

“While the section is upset with the Supreme Court’s decision to quash its evaluate of the circumstance, we regard the selection and will move ahead to situation refunds to the impacted taxpayers the moment the court’s selection is mandated to turn out to be remaining,” Taxation and Profits Department spokesman Charlie Moore reported.

The hottest twist comes just after the Court of Appeals ruled in January 2020 that clinical cannabis fulfills the definition of a prescription drug under New Mexico’s tax code given that physicians are essential to certify that people have a qualifying issue just before they can enroll in the method.

But the Taxation and Revenue Office appealed that ruling to the Supreme Court, arguing the Legislature by no means supposed for clinical cannabis to qualify for the deduction and questioning regardless of whether it ought to be thought of a prescription drug.

The Supreme Court had scheduled oral arguments in the situation for Feb. 28, but its unanimous ruling on Tuesday canceled the listening to and correctly dismissed the appeal.

In addition to the money implications, at minimum one particular prominent health-related hashish producer stated Tuesday the Supreme Court’s selection could renew queries about medical cannabis fees currently being included both by private insurance plan corporations or Medicaid.

Duke Rodriguez, CEO and president of Ultra Health Inc., the state’s biggest health care hashish producer, claimed it could exclusively impression a pending ask for that insurers deal with the expense of healthcare cannabis buys for psychological overall health and similar therapy.

“This is a enormous conclusion,” Rodriguez told the Journal. “I think it’s primarily significant since it sets the precedent that health care cannabis is medication.”

He also said the whole dollar amount of money the tax office could have to pay back to healthcare cannabis producers for past gross receipts taxes could conclude up hitting — or even exceeding — $30 million.

The to start with claim for a tax deduction for medical hashish revenue was filed in 2014 by Sacred Back garden, a Santa Fe-based mostly cannabis producer, which sought a refund of approximately $275,000 for gross receipts taxes compensated around a 3-yr interval.

The refund claim was denied by the tax section, and a hearing officer subsequently turned down a protest.

But the organization then appealed the ruling in 2108 and was subsequently joined it is authorized effort and hard work by Extremely Health. An Ultra Overall health spokeswoman mentioned Tuesday the company stands to get a refund of $7.4 million moreover desire below the Supreme Court’s ruling.

New Mexico launched its clinical cannabis program in 2007 — the law is officially referred to as the Lynn and Erin Compassionate Use Act — and the quantity of people today enrolled in the method has surged in the latest several years.

There were being 130,345 energetic people in the application as of January — up from 81,771 patients in January 2020, according to the state Department of Wellbeing.