One year after legalizing cannabis for adults 21 and over, New Mexico prepares for its recreational cannabis market to begin. Sales should begin April 1, 2022, but this isn’t an April Fool’s Joke. The Cannabis Control Division of the New Mexico Regulation and Licensing Department is ready to start. The Director of the Division, Kristen Thomson, spoke with local news reporters about what they expect on opening day.
“We really expect that first day of business to be filled with excitement,” she said. Thomson also addressed a concern many retailers expressed when growers first began producing cannabis. “We do not have concerns about lack of product,” she explained. “As with any new gadget or restaurant or something opening, some products may come up short, but we do not anticipate a massive statewide shortage of product on opening day.”
New Mexico Cannabis Market
While the Cannabis Control Division may not be concerned about the lack of product, other stores are. Duke Rodriguez owns the state’s largest medical cannabis operation, and he predicts large problems will eventually come to the state. Within a year, “we will probably need to pare back as many as 100 locations, and there will be a lot of small businesses that will be hurt very badly.”
When the New Mexico Recreational Cannabis bill was signed by Governor Michelle Lujan Grisham, there was no cap placed on the number of retail licenses issued. This would help keep the retail market as open as possible for social equity purposes. However, growers received a cap on the number of plants they can grow at 20,000. While this seems like a sufficient amount, New Mexico issued over 225 retail licenses. Additionally, the state’s medical cannabis program has over 132,000 individuals enrolled. Shortages will happen at some point.
Each retail business must hold back about 20 percent of their products for medical cannabis patients. This could lead to the recreational and medical cannabis markets competing with each other for cannabis.
State Comparison
Looking at the New Mexico soon to come recreational cannabis market, it helps to look at neighboring state Arizona. Voters approved recreational cannabis sales and regulation at the polls in November 2020. Then in January 2021, Arizona began recreational cannabis sales. The state, with a population three times bigger than New Mexico, only issued 75 retail licenses. Stores have yet to run out of product and the market continues to grow. In its first year of operation, the recreational cannabis market earned about $1.4 billion in revenue.
Because of the lower population, New Mexico regulators expect to see the market worth increase to $400 million by 2026. Much of this growth will most likely come from Texas residents crossing the state line. Texas still hasn’t legalized recreational or medical cannabis, but has been working towards medical cannabis for qualifying patients.
Future of Cannabis in New Mexico
New Mexico citizens, as well as out of state visitors, will soon have access to recreational cannabis. New Mexico’s governor is proud to bring cannabis to the state.
“The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” Governor Lujan Grisham said shortly after signing recreational cannabis into law. “We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed war on drugs. And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better.”
Should the market experience growing pains, or not meet demand in the first few months, we will be sure to update you with the latest.
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