NMS2S Update: TRO’s, Test’s, & Transfer’s

On August 31, 2026, at 2:00 p.m., the Second Judicial District Court in Bernalillo County heard arguments in OCC ABQ LLC, et al. v. New Mexico Regulation and Licensing Department, et al., Case No. D-202-CV-2026-07913. Judge Joshua A. Allison reviewed the plaintiffs’ request for a temporary restraining order seeking to pause New Mexico’s NMS2S rollout, which had already begun. The case was brought by OCC ABQ LLC and other industry plaintiffs, with support from CANM

TRO Paused

While the judge was not inclined to pause the rollout today, a roughly 72-hour period was set for the parties to reconvene and assess whether the rollout has, in fact, allowed licensees to conduct transfers. That follow-up is expected to take place Thursday or Friday.

We missed a portion of the opening testimony, plaintiffs spoke about the impact of the rollout. The licensee, which has been one of the state’s leading operators for several months now, was well positioned to provide insight into the operational impact.

After that, we saw Director Todd Stevens take the stand. He opened by talking about starting his career as a budtender, which was one of the first things that stood out to me. As someone who also started my regulated-market career as a budtender, I know i would be pissed if i continuously heard someone suggest i didn’t know what I was doing. Stevens also discussed going through previous system integrations and having to resort to paper receipts during outages.

That told me two things: he knows outages happen, and he knows they aren’t necessarily going to stop operators from finding a way to keep doing business—because historically, they haven’t.

METRC & You

During testimony, Director Stevens also referenced cost as part of CCD’s justification for selecting NMS2S. He testified that the new contract saved New Mexico more than $800,000 and eliminated additional fees associated with things such as tags or items that could have been charged by other vendors. He contrasted that with NMS2S having no paywall or additional service tiers.

While it was not mentioned during the hearing, according to records, the reported cost for METRC for New Mexican licensee’s would have been approximately $0.40 per plant tag; or sublot action, plus a $50 monthly fee just for the state-mandated compliance layer. That doesn’t include Dutchies, your BioTracks, your QuickBooks, or any of the other systems operators pay for to actually manage their businesses and inventory. So as far as added cost goes, large scale producers and manufacturers dodged a plastic QR code coated bullet.

API’s Incoming

We also learned that the State originally only required API development for retail point-of-sale systems. Production and manufacturing APIs were not required under the contract. However, those APIs have since been requested and are planned for a Phase Two launch, although no timeline has been publicly outlined.

That means producers and manufacturers may be forced to work directly in NMS2S as well as maintain their normal business systems.

The State itself discussed manual updates and templates operators could use to reconstruct activity after the outage. The compliance consequence is obvious, every additional manual touch creates another opportunity for inventory discrepancies, missed transactions, delayed transfers, and reconciliation problems.

Old Friends

Outside the courtroom, operators started receiving access to their migrated NMS2S inventory—and a lot of them logged in to find some old friends. It turns out plenty of operators had not been successfully syncing all of their state-side data.

As a result, some inventory appeared to be missing while other records from years past were still hanging around. On top of that, inventories were initially dumped into a single room, with some products needing to be mapped into the appropriate new categories.

I would personally encourage all operators to conduct a full wall to wall cycle count and reconcile the NMS2S inventories ricky-motherf*cking-ticky right now before this little window closes. The requirements for adjustements going forward is a minimum of 50-characters to explain what happened, on top of everything else.

New Friends

The fact of the matter is, most operators turned their backs on the free online compliance software long ago—not because they stopped caring about compliance, but because other systems stepped in offering better business-management tools while still integrating with the State’s compliance system.

For large-scale operators with massive tech stacks, there’s going to be a period of making sure the Tower of Babel doesn’t tumble. Systems have to reconnect, data has to reconcile, and workflows have to be rebuilt or adjusted. They have the resources to throw manpower at the problem.

The mid-sized operator may be in a tougher position. Many adopted third-party systems specifically to automate processes and eliminate the need for additional administrative positions. If those integrations aren’t immediately available, they may suddenly need more people to do work the software was supposed to eliminate—without necessarily having the money to hire them.

I expected the micros to be taking this the hardest, but it turns out, smaller operations may be the least phazed. In fact, some of them were even ahead of me.

Jeffrey Castillo with High Lonesome had a positive first experience with NMS2S. He keeps it simple. Because he only used the free BioTrack version and maintained clean, well-organized inventory, his transition was relatively easy, in fact it had a few more features.

He particularly liked the bulk actions, improved inventory organization, expiration-date fields, and ability to copy inventory IDs directly into other systems. His main issue wasn't NMS2S itself—it was waiting for third-party integrations to reconnect.

That last example really drives home how this transition is playing out. The operators having the easiest time are the ones who knew exactly what they had, where it was physically, and where it existed digitally.

AI Slop

There has also been considerable confusion surrounding new testing and packaging requirements. Last week, a slideshow posted online raised concerns about edible testing, with some interpreting the guidance to mean licensees would be required to conduct a separate test for every two pounds of gummies.

Those slides were later removed, but no public correction explaining why the edit was made. Some operators also reported seeing information suggesting packaging requirements were changing, prompting them to panic-buy supplies. However, Phresh could not confirm that it had received any new packaging requirements beyond the changes discussed in CCD’s proposed rules last year.

Labs appear to be dealing with uncertainty as well, with multiple labs indicating they have not received clear guidance for final-batch testing outside of the existing framework they are accustomed to, including the current 15-pound flower lot requirements.

While it has not been officially published, our current understanding is that the two-pound threshold for gummies relates to representative sampling, not batch division.

A larger final batch of gummies does not automatically have to be broken into separate two-pound batches and individually tested. Instead, as the batch becomes larger, the laboratory collects additional portions of product to create a representative sample of that batch.

Those portions collectively represent the larger batch for testing purposes. If the required testing passes, the associated batch passes; the additional portions do not represent separate, independent compliance tests.

Quasimoto

One of the hardest parts of this transition has been piecemealing information together and separating fact from fiction. You would think CCD could simply publish every fact operators need to know before the rollout, because getting hundreds of operators—using dozens of different combinations of software—to interpret incomplete information, sounds simple…

I get the hesitation. If the State, or anyone for that matter, publishes something that's wrong or incomplete, operators can make business decisions based on it with serious financial consequences. But then again, if you wait for something to be perfect, nothing would ever get done…