New Mexico Archives - Green Market Report

New Mexico is now the 18th state to legalize the sale of adult-use cannabis and those sales began last Friday. According to television station KOAT, as of noon on Sunday, recreational sales in the state had reached $3 million. Hundreds of residents had lined up at dispensaries to purchase legal recreational cannabis. KOAT said that according to state officials, 49,552 transactions had occurred totaling roughly $3,092,712.

Democratic governor,  Michelle Lujan Grisham was reportedly at a dispensary for the occasion but did not make a purchase. Instead, she was seen speaking with customers.

“I’m excited, this is what New Mexicans said they wanted,” Lujan Grisham said, as quoted by the station. “They said they wanted it long before was I running.”

KRQE reported that, “Non-medical, adult-use cannabis sales passed $475,000 before noon on April 1 and reached $1 million sometime before 4:00 p.m., according to numbers from the Cannabis Control Division (CCD). By 8:00 p.m. statewide total adult-use cannabis sales were starting to approach $1.8 million. As of midnight, $1.9 million had been spent on adult-use cannabis.” The local television station also reported that one dispensary Bad Company got off to a rough start when its software provider BioTrack malfunctioned and would only allow medical marijuana products to be entered. It apparently was resolved and the dispensary was able to begin those sales.

“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,” said Gov. Michelle Lujan Grisham in a statement. “We’re ready to break new ground. We’re ready to invest in ourselves and the limitless potential of New Mexicans. And we’re ready to make this industry a successful one that helps transform New Mexico’s economic future for the better.”

Most of the dispensaries are located in and around Albuquerque. The state also expects numerous Texas residents to cross state lines to make purchases.

“This is the right model for New Mexico because it creates a local, sustainable and regulated industry while at the same time protecting our public health, road safety and the well-being of our youth,” said Superintendent Linda M. Trujillo of the state Regulation and Licensing Department, which will oversee and manage the new industry. “The standardization and statewide regulation that comes with a bona fide industry will protect consumers. In addition, local jurisdictions will be able to enact reasonable zoning, land use and other business requirements.”

New Mexico became the 18th state to legalize cannabis for adults 21 and over after Gov. Michelle Lujan Grisham (D) signed the Cannabis Regulation Act (HB 2) into law on Monday.  New Mexico is now the fifth state to adopt a legalization policy by passing a bill through its state legislature, joining Illinois, Vermont, New York, and Virginia. Thirteen additional states have legalized by voter initiative.

According to Marijuana Policy Project, HB 2 legalizes personal possession of up to two ounces of cannabis and home cultivation of six mature plants for adults 21 and over. Additionally, HB 2 includes measures to encourage those who were disproportionately impacted by prohibition to enter the new industry. A companion bill — SB 2 — will provide for automatic expungement. Legal sales will begin no later than April 1, 2022. A summary of HB 2 is available here.

“We commend New Mexico lawmakers and advocates for ending cannabis prohibition. This move will end the injustice of criminalizing New Mexicans for a substance that is safer than alcohol. States across the country are rolling back prohibition and finding that legalizing and regulating cannabis works. This victory in New Mexico, along with the recent legalization victories in New York and Virginia, will help tip the scale towards federal cannabis reform,” said Steve Hawkins, executive director at the Marijuana Policy Project.

New Mexico Market

UltraHealth, the state’s largest MMJ operator said in a statement, “Combined patient sales from the 34 licensed producers in New Mexico’s Medical Cannabis Program totaled $203 million in 2020, an increase of $74 million or 57% over reported patient sales in 2019. Ultra Health, New Mexico’s #1 Cannabis Company, led all operators with nearly $40 million in patient sales, 71% greater than its nearest competitor.”

Altogether, New Mexico’s top five providers accounted for 55% of reported patient sales in 2020, an increase from 49% the previous year. The top 10 out of 34 total providers accounted for 74% of total patient sales in 2020.

“In less than a month, the number of states that have legalized cannabis through the legislative process has more than doubled —  from two to five. While we are encouraged by this progress, we urgently call on the other 32 state legislatures to listen to their constituents and legalize cannabis. With supermajority support for legalization, it is outrageous that more than 1,000 Americans are arrested for cannabis every day,” said Matt Simon, senior legislative analyst at the Marijuana Policy Project.

NORML State Policies Manager Carly Wolf said: “This is a day to celebrate! New Mexico will greatly benefit from this new revenue stream and the creation of thousands of jobs. Most notably though, legalization will spare thousands of otherwise law-abiding residents from arrest and a criminal record, and the state’s new expungement law will help provide relief to many who are suffering from the stigma and other collateral consequences associated with a prior marijuana conviction.”

NORML Executive Director Erik Altieri added: “New Mexico joins an ever-growing list of states that have realized the failures of marijuana prohibition and the harms it brings to their communities and citizens. The American people are demanding an end to prohibitionist policies that have wreaked havoc on communities of color, squandered countless millions in taxpayer dollars, and wasted limited judicial and law enforcement resources on criminalizing otherwise law-abiding individuals for possession of a product that is objectively less harmful than alcohol or tobacco.”

New Mexico is one step away from becoming the 17th state to legalize cannabis for adult use and the fourth state to adopt a legalization policy by passing a bill through its state legislature. The last stop is Democratic Governor Michelle Lujan Grisham’s desk for signing. New Mexico follows New York state, which also took this route to full legalization. Illinois and Vermont chose the legislator path while 13 other states have legalized by voter initiative.

Members of the New Mexico House and Senate gave their final approval on Wednesday to two separate measures amending the state’s marijuana laws. The first legalizes and regulates marijuana possession, production, and sales for adults. The second facilitates the automatic review and expungement of the records of those convicted of low-level marijuana offenses.

“New Mexico legislators and advocates deserve a round of applause as they are on the verge of legalizing cannabis for adult use. This year is proving to be nothing short of monumental for the cannabis policy reform movement. State legislatures across the nation are recognizing the urgent need to end cannabis prohibition and are rising to the challenge,” said Steve Hawkins, executive director at the Marijuana Policy Project. MPP said in a statement that under HB 2, personal possession of up to two ounces of cannabis and home cultivation of six mature plants will be legal for adults 21 and over. Additionally, HB 2 includes measures that would encourage those who were disproportionately impacted by prohibition to enter the new industry. Legal sales would begin no later than April 1, 2022. A companion bill provides for automatic expungement.

Commenting on the bills’ passage, NORML State Policies Manager Carly Wolf said: “This is a historic day for New Mexico! These important policy changes will ensure that consumers going forward will no longer suffer criminal arrest and prosecution, while also remedying past injustices caused by the drug war. I commend lawmakers for working together to craft legislation that prioritizes social justice and inclusion. Passage of this legislation will ensure that minor marijuana possession offenders, many of them young people, are no longer saddled with a criminal record and the lifelong penalties and stigma associated with it.”

Emily Kaltenbach, Senior Director for the Resident States and New Mexico for the Drug Policy Alliance said, “New Mexicans are finally able to exhale. After many years of hard work, another whirlwind legislative session, and input from stakeholders throughout the state, social justice-centered cannabis legalization is on its way to the Governor’s desk, where she has already agreed to sign. We thank the Governor and our legislative allies for not taking ‘no’ for an answer and stopping at nothing until we were able to get justice for New Mexico communities—particularly Hispanic/Latinx, Black, Native and Indigenous—that have been immensely harmed by cannabis prohibition.”

She added, “Today’s passage of the cannabis legalization and expungement package will ensure equitable opportunities for farmers and other small businesses, and long overdue justice—including automatic expungement—for those with past cannabis arrests or convictions. And it doesn’t stop there. We still have our work cut out for us to fully repair the damage that has been done as a result of the war on drugs, and that means coming back during the 2022 budget session to ensure funds are made available for critical reinvestment in the communities that have been most harmed.”

NORML Executive Director Erik Altieri added: “New Mexico joins an ever-growing list of states that have realized the failures of marijuana prohibition and the harms it brings to their communities and citizens. They are the third state so far this year that has approved legalization via the legislative process and we expect several more will follow suit in a short period of time. The American people are demanding an end to prohibitionist policies that have wreaked havoc on communities of color, squandered countless millions in taxpayer dollars, and wasted limited judicial and law enforcement resources on criminalizing otherwise law-abiding individuals for possession of a product that is objectively less harmful than currently legal alcohol and tobacco. Thankfully lawmakers at the state level are finally implementing the will of their constituents and, by doing so, they are applying further pressure on the federal government to finally deschedule marijuana nationally and end this ongoing tension between state and federal policies.”

The New Mexico Medical Cannabis Program racked up $106 million in sales in 2018 for a 23% increase over 2017. Patient enrollment grew by 45% from 2017 to 2018 and now counts 67,574 patients in the system. It’s easy to see an imbalance here. The patient count grew faster than sales.

The largest provider in the system Ultra Health said that the problem is plant count limits combined with regulatory hurdles. The company was the largest provider in the state with a market share of 15.4% in 2018 and reporting $16 million in revenue for the year.

“Surpassing $100 million is a great milestone for the Medical Cannabis Program,” said Ultra Health CEO Duke Rodriguez. “However, the industry would have exceeded $212 million if patients were able to purchase an adequate supply of cannabis as allowed for similar patients in Arizona and Colorado.” The belief is that patients are being forced to seek medicine outside of licensed providers which is considered the black market.

Some of the restrictions include purchase limits, potency caps, no reciprocity with patients from other legal states and the inability of producers to offer savings for large purchases.  The problems re causing high prices for the patients.

The state’s top five producers accounted for 43% of the reported revenue in 2018 and there are 35 licensed producers. Only 12 grew faster than the overall industry’s pace, while 23 producers fell behind.

Ultra Health said that under the current medical marijuana program, revenues are projected to reach $131 million by the end of 2019 and patient enrollment is forecast to reach 87,500. The company said that if the program allowed patients to fully access medical cannabis like Arizona and Colorado, the industry could have easily hit $290 million in sales.

“Whether it’s for physical, mental or social well being, every adult presenting themselves should have the full legal right to choose the cannabis products they need, in the quantities they want, from the provider they prefer and at a price they can afford,” said Rodriguez.

A new report from BDS Analytics and Arcviews stated, “Despite inaction on calls to expand access by adding
qualifying conditions, the state has made some small improvements to the cannabis program. State officials
have simplified the application process for those seeking a medical cannabis card and made other changes
to the application process to address complaints of long application backlogs that result in delayed card issuance.”