New Mexico has become one of the leading states in the cannabis industry, surpassing $1 billion in combined adult-use and medical sales. The state achieved this milestone in less than two years since legalizing recreational cannabis in April 2022. Here are some of the key factors that contributed to New Mexico’s cannabis success story.
A Progressive and Inclusive Legal Framework
New Mexico’s Cannabis Regulation Act, signed by Gov. Michelle Lujan Grisham in April 2022, established a comprehensive and progressive legal framework for the regulation and taxation of cannabis in the state. The act aimed to create a fair and equitable cannabis market that would benefit the state’s economy, public health, and social justice. Some of the notable features of the act include:
- A 12% excise tax on cannabis sales, in addition to state and local taxes, with revenues going to the state general fund and local communities.
- A provision for automatic expungement of past cannabis convictions and the creation of a review board to consider petitions for resentencing or release of cannabis offenders.
- A social and economic equity plan to ensure that communities disproportionately impacted by cannabis prohibition have access to licenses, grants, loans, and training opportunities in the cannabis industry.
- A microbusiness license category to allow small-scale producers and retailers to enter the market with lower fees and requirements.
- A home cultivation option for adults to grow up to six plants per person or 12 per household, with a limit of two ounces of usable cannabis at any time.
- A medical cannabis program that allows patients with qualifying conditions to access cannabis products without paying the excise tax and with higher possession and purchase limits.
A Robust and Diversified Cannabis Market
New Mexico’s cannabis market has grown rapidly and steadily since the launch of adult-use sales in April 2022. According to the state’s Regulation and Licensing Department, cannabis consumers have purchased more than $678.4 million worth of adult-use cannabis products and $331.6 million in medical products as of March 1, 2024. The state has recorded more than 21 million transactions with $75 million in cannabis excise taxes going to the state general fund and local communities.
New Mexico’s cannabis market is also diverse and competitive, with a variety of products, brands, and retailers available to consumers. As of March 1, 2024, the state has issued 2,873 cannabis licenses across New Mexico, including 1,050 retailers, 878 manufacturers, and 459 micro producers. The state has also seen a surge in cannabis tourism, especially from neighboring Texas, where cannabis remains illegal. Sunland Park, one of the many communities that has been positively impacted by cannabis tourism, recorded $57.4 million in adult-use sales.
A Supportive and Responsive Government
New Mexico’s government has played a crucial role in supporting and overseeing the cannabis industry, ensuring its safety, quality, and sustainability. Gov. Michelle Lujan Grisham, who championed the legalization of cannabis, has praised the industry for its economic and social benefits. “This is a huge milestone for New Mexico’s cannabis industry,” she said in a press release. “Nearly two years after beginning sales, New Mexico is on the map as a premier hub for legal and safe cannabis and the thriving business community that comes with it.”
The state’s Regulation and Licensing Department, which is responsible for regulating the cannabis industry, has also been proactive and responsive to the needs and challenges of the market. The department has issued rules and guidance on various aspects of the industry, such as testing, labeling, packaging, advertising, and environmental standards. The department has also conducted inspections, audits, and enforcement actions to ensure compliance and protect public health and safety.
The state’s legislature has also been involved in refining and improving the cannabis laws and policies, passing several bills to address issues such as taxation, licensing, social equity, and hemp production. The state’s lawmakers have also been receptive to the feedback and input of the cannabis industry and stakeholders, holding hearings and consultations to discuss the best practices and solutions for the cannabis sector.
A Bright Future Ahead
New Mexico’s cannabis industry has achieved remarkable results in a short span of time, but it is not resting on its laurels. The industry is constantly innovating and expanding, offering new products, services, and experiences to consumers. The industry is also looking forward to the future, anticipating the potential of federal legalization and interstate commerce, as well as the opportunities for research, education, and social impact.
New Mexico’s cannabis industry has proven to be a boon for the state’s economy, public health, and social justice. The industry has also shown the rest of the country and the world that cannabis can be a safe, legal, and profitable product that can benefit everyone. New Mexico’s cannabis boom is not a fluke, but a result of a visionary and collaborative effort that has made the state a leader in the cannabis space.
