New Mexico’s medical marijuana gross sales have almost doubled up to now two years regardless of strict plant-count limits, and the state is likely to be higher positioned to legalize leisure hashish after neighboring Arizona did so final month.
Marijuana Enterprise Day by day tasks an adult-use hashish market in New Mexico may generate $350 million in annual retailer gross sales by its fourth yr of operation.
The state’s MMJ gross sales, in the meantime, are rising. Fueled by the coronavirus pandemic and affected person progress, gross sales are on tempo to achieve round $200 million this yr.
New Mexico’s MMJ gross sales totaled $130 million in 2019, based on the Marijuana Enterprise Factbook.
The sparsely populated Southwest state just lately exceeded the 100,000 milestone in registered sufferers. The affected person depend has elevated almost fourfold since 2016.
“Gross sales are undoubtedly up. We’ve seen a big uptick – as a lot as 100% progress over final yr – which I’d attribute to the pandemic,” stated William Ford, founder and chair of R. Greenleaf Organics, which has eight dispensaries in New Mexico.
Business consultants see New Mexico as a probable candidate to legalize grownup use subsequent yr by way of its Legislature, partially as a result of its extra conservative neighbor to the west, Arizona, did so in November by way of a poll initiative.
With out legalization, Arizona’s leisure market may entice New Mexico residents throughout the border and depress MMJ gross sales in that state.
Additionally, leisure marijuana gross sales may assist New Mexico’s price range, which, like different states, has been harm by the financial price of the pandemic.
New Mexico is among the states “ripe” for leisure marijuana legalization, Steve Hawkins, government director of Washington DC-based Marijuana Coverage Venture, stated in a latest interview.
Nonetheless, adult-use legalization payments in New Mexico have failed up to now two years, and the state Senate has beforehand been the largest impediment.
A number of competing legalization payments are within the works.
The state’s medical hashish market posted gross sales of $147 million within the first 9 months of 2020 – together with $55 million in a scorching third quarter – based on figures obtained by UltraHealth, the state’s largest MMJ operator.
That places the state in line to achieve round $200 million in gross sales this yr.
New Mexico has 34 licensed nonprofit vertically built-in MMJ operators, with 123 dispensaries in operation statewide, based on the newest state knowledge.
Publish-traumatic stress dysfunction is the No. 1 affected person qualifying situation, adopted by extreme power ache, state Division of Well being knowledge reveals.
Onerous plant-count limits
The highest problem to an much more sturdy MMJ market and a fast transition to grownup use is the state’s strict plant-count limits, stated Duke Rodriguez, CEO of UltraHealth, which has 24 dispensaries throughout the state.
“We’re at an enormous drawback in relation to having an enough provide,” Rodriguez stated.
Medical marijuana operators in New Mexico have been in litigation over the plant-count limits for years. In 2018, a decide dominated {that a} then-limit of 450 crops per cultivator was arbitrary and too limiting.
The state responded by growing that quantity to 1,750.
However the operators sued once more.
Though the transfer to 1,750 appeared like a big improve, Rodriguez famous that the variety of sufferers has elevated within the meantime and the plant depend stays equal to roughly half a plant per affected person.
By comparability, neighboring Arizona and Oklahoma don’t have plant limits, and Colorado’s is equal to roughly 9 crops per affected person cardholder, he stated.
Colorado has 85,000 registered MMJ sufferers – 15,000 fewer than New Mexico – but is projected to achieve $380 million in MMJ gross sales this yr, based on the Marijuana Enterprise Factbook.
That’s round double New Mexico’s projected gross sales.
“We’ve gotten a pleasant bump from the COVID influence, however we nonetheless lag different medical packages of comparable measurement,” Rodriguez famous.
New Mexico’s MMJ retail costs additionally stay greater than in neighboring states, he stated.
The state’s 34 licensed MMJ operators are permitted to domesticate a mixed 59,500 crops.
However Rodriguez estimates that the state would wish to domesticate as many as 600,000 crops if an adult-use program is launched.
“We clearly don’t have the infrastructure to satisfy what a sturdy legalization market would require,” he stated.
Ford of R. Greenleaf Organics disagrees that the plant-count restrict is a matter for the state’s MMJ program.
“Nonetheless, I feel New Mexico has but to essentially mature as a market … that’s, embracing know-how and superior strategies in cultivation,” Ford stated.
“I feel if folks have been using new know-how, they’d don’t have any issues assembly the wants of the market.”
However Ford agrees the plant-count restrict would should be elevated if marijuana is legalized for grownup use.
An advisory board beneficial this week that New Mexico MMJ regulators contemplate growing the plant depend, based mostly on considerations about excessive product prices and the dearth of selection, the Related Press reported.
Legalization prospects brilliant
Gov. Michelle Lujan Grisham has embraced leisure hashish legalization, seeing it as a technique to strengthen and broaden the state’s economic system, which is closely reliant on oil and fuel.
Business officers stated a invoice earlier this yr was too centered on particular pursuits reminiscent of a labor peace provision and in addition got here throughout a brief session.
The Nov. 3 election noticed progressives acquire seats within the state Legislature, brightening legalization prospects.
Ford advocates for a invoice that may defend the state’s medical marijuana program and create a separate basic “wellness program” during which gross sales are taxed at 15%-25%.
In keeping with the draft invoice, a “wellness” affected person wouldn’t want a physician’s advice however must register with the state and be older than 25.
“My concern is that New Mexico has totally different challenges when it comes to substance abuse, habit,” he stated.
State Rep. Javier Martinez informed a panel of lawmakers in November that he’ll introduce laws in 2021 aimed toward preserving the state’s 13-year-old MMJ program and creating enterprise alternatives for minority and low-income communities adversely affected by the battle on medicine and the criminalization of marijuana.
UltraHealth stated it helps a mannequin that may:
- Allow present MMJ operators to have a head begin of about six months earlier than different licensees.
- Have an infinite plant depend and limitless licensing, with an emphasis on microbusinesses.
- Impose a gross sales tax charge of 15%-20%.
Rodriguez stated he believes an adult-use market could possibly be launched as quickly as July 2021, however it’s unclear how the state would deal with provide points if plant-count limits stay intact.
He stated UltraHealth’s mannequin reveals that grownup use may generate $800 million in gross sales a yr based mostly on limitless licensing.
The mannequin, he stated, estimates {that a} staggering 40% of gross sales may come from Texans, a lot of whom come throughout the border to ski and luxuriate in different vacationer sights. Texas at the moment gives solely a restricted MMJ program to its residents.
Public sentiment for adult-use legalization is powerful, “so naturally the assumption can be that this can be a no-brainer,” Rodriguez stated, “however traditionally we’ve proven a particular capacity to fail on the apparent.”
Jeff Smith will be reached at [email protected]
