New Mexico will launch commercial cannabis sales April 1, under an adult-use legalization law that took effect last year. (Roberto E. Rosales/)
Copyright © 2022
SANTA FE – With the launch of commercial cannabis sales just days away, eastern New Mexico is both bracing for big change and embracing the new industry’s potential economic benefits.
In Texico, which abuts the New Mexico-Texas state line, an Albuquerque-based cannabis company has purchased the old Double Play Diner just a stone’s throw from the state line and is renovating it as a dispensary.
It’s one of two already-licensed cannabis retail outlets in Texico, with a third license application still pending, according to state Cannabis Control Division records.
“We’re looking forward to having a dispensary right there at the edge of town,” said Trishelle Kirk, the chief operating officer of Everest Cannabis Co., which bought the diner after it closed during the COVID-19 pandemic.
Brian Rogers, who grew up on a Curry County farm just a mile or so from the Texas state line, left his Wall Street job after New Mexico legalized recreational cannabis and came back home to help set up a cannabis growing facility.
He got his cannabis microproducer license this month and plans to supply the Texico dispensary, and other retailers, with marijuana products.
“This represents the best opportunity to date for economic development on this land,” said Rogers, who added his family has owned the farm since 1906 and previously cultivated dryland wheat and other crops.
“Every spot where Texans can cross the border and enter (New Mexico) is now valuable territory from a cannabis perspective,” Rogers added.
New Mexico lawmakers approved a bill legalizing recreational cannabis for adult users during a March 2021 special session called by Gov. Michelle Lujan Grisham.
The law made it legal to possess small amounts of marijuana starting last summer, but delayed the start date of commercial weed sales in order to give state officials time to craft the rules that will govern the cannabis industry.
With commercial sales set to start April 1, the green tsunami could bring tax dollars, new commercial activity and law enforcement challenges to traditionally conservative eastern New Mexico, which is sometimes referred to as “Little Texas.”
Much of the benefits could come from Texas, which Arizona and Colorado has not legalized unlike recreational cannabis, and has large population centers like Amarillo and Lubbock within easy driving distance.
Duke Rodriguez, CEO and president of Ultra Health Inc., the state’s largest medical cannabis producer, said at least 30% – and possibly more – of New Mexico’s legal cannabis sales could end up being made by Texans crossing state lines to participate in the state’s newest industry.
“There’s no question the success of the adult cannabis program will be materially dependent on Texas,” Rodriguez said.
A report conducted last year by Massachusetts-based Cannabis Public Policy Consulting projected New Mexico’s fledgling cannabis market to hit $782 million in legal sales by 2026, a figure that includes tourist and cross-border purchases.
The report also estimated that New Mexico’s regulated cannabis industry will supply 20% of the marijuana products purchased within a 200-mile zone from the state’s boundaries.
High tourist demand
While there’s ample excitement in eastern New Mexico about the start of legal cannabis sales, there’s also trepidation.
Sen. Cliff Pirtle, R-Roswell, who served on a 2019 cannabis legalization task force but ended up voting against the 2021 legalization bill that won legislative approval, expressed concern that tourist interest in New Mexico cannabis could overwhelm the state’s supply – at least initially .
“Our shelves are going to be empty and a lot of it is going to be due to people coming over from Texas,” Pirtle told the Journal.
He also joked the streets of San Jon, a small town in Quay County that’s less than 20 miles from the Texas border, could be paved in gold due to expected profits from the cannabis industry.
“There’s a lot of people who want to purchase cannabis, but don’t want to buy it from a cartel or a drug dealer,” he added.
Marissa Novel, Ultra Health’s chief marketing officer, said ensuring adequate cannabis supply will pose more of a challenge than obtaining licenses and staffing new dispensaries.
“The real challenge will be supplying the establishments in eastern New Mexico,” Novel told the Journal.
Ultra Health already runs 30 medical cannabis dispensaries around New Mexico – it has two locations in Santa Fe and seven in Albuquerque – and plans to open 10 more stores once recreational cannabis sales begin.
That includes new dispensaries in Santa Rosa, Tucumcari and Sunland Park.
Clovis Mayor Mike Morris said it’s hard to predict exactly how the advent of commercial cannabis sales will impact his city of roughly 38,000 residents.
He said the recreational cannabis industry offers promise from an economic standpoint, while also citing the potential for marijuana processing and manufacturing facilities to be located in Clovis.
But the mayor also expressed concern about challenges like enforcing laws against impaired driving and said local governments have had little guidance from the state when it comes to preparing for the start of cannabis sales.
With the effective date of legalization looming, Morris said he spoke with the mayor of Trinidad, Colorado, who advised him to limit the number of cannabis dispensaries in his town.
“We want to be open to this new industry and give it every opportunity to succeed,” Morris said. “But I would hate for us to earn the reputation as a cannabis town.”
A former diner in Texico located just a few feet from the New Mexico-Texas state line is being renovated as a cannabis dispensary by Everest Cannabis Co. (Courtesy of Top Notch Remodels)
Growth opportunity
Unlike in neighboring Colorado, New Mexico cities and counties can not opt out, or bar cannabis dispensaries from opening in their jurisdictions, under the legalization bill signed into law by Lujan Grisham.
“I think there had been an opt-out (provision), that would have been a real conversation in Clovis,” Morris acknowledged.
Local governments are also prohibited from making it illegal to transport cannabis products on public roadways, provided the individuals in possession are not under the influence and are also complying with other aspects of the law.
However, cities and counties do have the authority to set rules governing the location, density limits and hours of operation for marijuana retailers. And over the last year, many cities and counties around New Mexico have adopted ordinances establishing those local rules.
In Clovis, for instance, cannabis retailers are not allowed to operate within 300 feet of an existing school, preschool or church. They also cannot be set up within 500 feet of any other cannabis dispensary and can only operate between the hours of 9 am and 8 pm daily.
The rules adopted are similar in nearby Portales, though the minimum buffer between cannabis dispensaries is set at 200 feet there and retailers can open earlier and stay open later.
In large part, those rules are intended to prevent the “green mile” effect in which cannabis dispensaries proliferate in certain areas.
While some eastern New Mexico civic leaders might be wary, Kirk said the cannabis industry has been warmly welcomed by many farmers in the arid region.
She also said Everest Cannabis Co. has hired local contractors to renovate its Texico dispensary, which could be open to customers by mid-April.
“I think there’s probably still some skepticism about cannabis in general, but there’s a lot of excitement about the economic development opportunity,” said Kirk.
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