Recreational cannabis sales in New Mexico surpass $300 million in first year

Recreational marijuana sales in New Mexico totaled more than $300 million in the first year of regulated adult cannabis sales, New Mexico Gov. Michelle Lujan Grisham announced April 3.

Lujan Grisham signed the Cannabis Regulation Act into law in April 2021, legalizing the use of marijuana for adults and creating a framework for the regulated sale of adult-use cannabis. Just a year later, in April 2022, licensed recreational marijuana sales began at regulated dispensaries across the state. Since then, New Mexico regulators have issued approximately 2,000 cannabis licenses across New Mexico, including 633 cannabis retailers, 351 producers, 415 micro-producers and 507 manufacturers, the governor’s office reported.

“In just one year, hundreds of millions of dollars of economic activity have been generated in communities across the state, the number of businesses continues to grow, and thousands of New Mexicans are employed in this new industry,” Lujan Grisham said in a statement on March 3. April. “I’m excited to see what the future holds as we continue to develop an innovative and safe cannabis industry for adult use.”

$27 million in cannabis taxes

Monthly recreational cannabis sales have remained stable during the first year of legalization, with the most recent month posting the highest monthly total at $32.3 million. Over the past year, more than 10 million recreational cannabis sales transactions have been completed, generating more than $27 million in cannabis excise taxes for the state general fund and local communities.

The major cities of Albuquerque, Las Cruces, and Santa Fe saw the strongest recreational cannabis sales, while the smaller communities of Clovis, Farmington, and Ruidoso each recorded more than $7 million in adult-use sales. Retailers in towns bordering Texas, where recreational marijuana is still illegal, also saw strong sales of adult-use cannabis.

“I’m over the moon that the industry got off to such a strong start,” Javier Martínez, a Democratic congressman who has campaigned for legalization for years, told the Albuquerque Journal. “We [legalized] it the right way.”

Last week, Superintendent of the New Mexico Regulatory and Licensing Department, Linda M. Trujillo, noted the strong growth of the cannabis industry for consumption of cannabis in New Mexico in its first year of sale, adding that the agency expects more in the coming years as the regulatory enforcement will begin months.

“There are over 2,500 people who own a controlling interest in a cannabis company,” said Trujillo, who currently oversees the Cannabis Control Division (CCD) after its acting director recently left. “Now we know the next step is compliance, and we’ve been building on the compliance aspect over the last year.”

Reilly White, associate professor of finance at the University of New Mexico’s Anderson School of Management, cited several factors that have led to a strong first year for the state’s adult cannabis industry.

“Strong consumer spending and historically low unemployment in New Mexico … have fueled the growth of recreational marijuana, and cannabis taxes have created an additional source of state and local revenue,” White said.

Market analysts believe the New Mexico cannabis industry could experience some correction in its second year, which could result in some dispensaries across the state shutting down. However, many are still confident that the state’s industry can grow in the long term.

“Cannabis in New Mexico has a clear path to growing to more than half a billion dollars a year, especially when we compare sales to states that legalized years ago,” White said. “But the road ahead will be bumpy – many companies may find their operations unsustainable as market saturation limits their growth. Uncertainty about the economic outlook is also a factor, given that it is not clear to what extent consumers would cut back on sales of leisure items during tough economic times. As the market matures, the industry will consolidate around the most successful, most successful companies in New Mexico.”