Deep Dive: Inside New Mexico's Adult-Use Marijuana Market Launch
Image: MJBizDaily
On April 1, New Mexico will become the latest state to offer adult use recreational legal cannabis in the US.
In addition to being the latest western state to offer legal recreatinal legal cannabis, New Mexico will also be of interest due to its focus on small business as well as its proximity to neighboring Texas.
Three points to know from this newest launch are below.
1: A Unique Regulatory Approach Preserves Small Business, and Water
New Mexico's approach to regulating their market has several novel aspects. Unlimited licensing, "microbusiness" licensing, and license discounts for retailers that accept cannabis products on consignment from a microbusiness producer are three measures the state is enacting in order to preserve the small business approach.
“We are here to facilitate an industry that is focused on the values of New Mexico and focused on startup businesses,” Kristen Thomson, director of New Mexico’s Cannabis Control Division, while at the same time ensuring that the state’s 35 vertically integrated legacy medical cannabis operators are supported.
“We’re making space for businesses of all sizes,” she added.
2: Texas Is Looming
Neighboring Texas is the second biggest economy in the US, yet is a cannabis desert. This means that New Mexico is expecting plenty of Texans in their stores.
“Our studies show that 40% to 42% of all adult-use cannabis will be derived from out-of-state purchases, particularly Texas,” Duke Rodriguez, CEO of the state’s largest cannabis company, Arizona-based Ultra Health, told the Santa Fe New Mexican last year.
Not only will this be a boon for the New Mexico market, it will present a new level of FOMO to Texan leaders, who continue to spend money policing cannabis use instead of making money from taxing it.
3: There Will Be An initial Supply Crunch
While initial demand will surge, licensed retailers and producers are still building out their facilities. This means that legal cannabis could be in scarce supply, and prices could be high, at least initialy.
"we’re expecting the short term to be quite ugly given supply constraints and the oversaturation of the market in terms of retail,” said Ultra Health’s chief marketing officer, Marissa Novel.
Kristen Thomson views the situation differently.
She said the Cannabis Control Division doesn’t expect product shortages or empty store shelves but noted that safeguards are in place if supplies do run short.
“If there’s going to be a shortage, supply goes to medical patients first,” Thomson said.
Read More:
New Mexico set to launch $400 million adult-use marijuana market likely to attract Texans [MJBizDaily]
