Ledes from the Land of Enchantment

New Mexico’s cannabis sales hit plateau after first six months

New Mexico cannabis dispensaries sold $1 million less in medical products in August than in July, as combined sales for medical and adult use appeared to sit at a plateau six months after the state opened commercial sales of cannabis to adults.

Since the state’s regulated marketplace opened for business on April, monthly combined sales have ranged from $37.7 million to $40.7 million. In September, the combined total reported by New Mexico’s Cannabis Control Division was $39,651,326.49.

Tax-exempt medical cannabis, available for state-enrolled patients, amounted to $15,420,930.70 in September, over $1 million less than in August.

While medical cannabis sales fell, adult use or “recreational” cannabis sales increased by less than a percent over the month, with $24,230,395.79 in September.

The data is based on reported sales from dispensaries in 59 municipalities.

The state Taxation and Revenue Department reported returns of $2,862,752.04 from 179 filers as of Sept. 28, a slight increase over August. Between July and August, the number of cannabis retailers filing taxes grew by 15 percent while revenue grew by just 2 percent. That growth slowed in September, with eight more filers than in August and dispensaries operating in five more towns or cities than in August.

Sunland Park, which sits on the Texas border, passed Rio Rancho for the first time since adult use sales opened, earning a spot in the top five cities with $1.55 million in combined sales. The top four remained Albuquerque ($14.1 million), Santa Fe ($3.3 million), Las Cruces ($3 million) and Hobbs ($1.7 million).

The unincorporated community of Chaparral, also situated close to El Paso, saw another sizable leap in combined sales, with $392,197 in September compared to $306,533 in July. In that month, Chaparral retailers reported a 92 percent month-to-month increase as more dispensaries opened there.

Pecos Valley Production's dispensary in Artesia, NM is seen September 2022.

Carlsbad, with $1.16 million in combined sales, remained in the top 10 cities for cannabis revenue, as did Ruidoso ($964,728) and Alamogordo ($919,706). All three cities saw dips in sales over the month: Carlsbad sold less in medical cannabis, while in the latter two cities sales retreated into both classes of cannabis product.

In the southwest, Deming’s combined sales jumped by 40 percent over the month, with $354,855 reported in September. Silver City, on the other hand, reported a 14.3 percent drop, with decreases in both medical and adult use cannabis.

Before the revenue report was released, Steve Pear, the president of the New Mexico division of Schwazze, predicted September’s numbers might come in below July and August. Schwazze owns the R. Greenleaf chain of dispensaries throughout New Mexico.

Pear said R. Greenleaf’s Las Cruces store, which opened at 12:01 am on the first day of legal adult use sales, which was the chain’s top performing dispensary statewide. For recreational or “rec” sales, Pear said retailers located near Texas, where cannabis remains illegal except for select medicinal uses, benefit from the neighboring state’s prohibition.

“You’re still building the rec side of the business,” he said of sales trends in the first six months. “The medical business is what it is; it’s got a huge base and there’s definitely been some increased medical consumers, but the upside is really on the recreational side, all the new people coming into the category and that continues to grow for us each day week month.”

When asked if he shares a concern voiced by some producers that New Mexico’s plant count limits are inflating prices by holding supplies down, Pear answered, “No. Not at all. … We have no issues with supply.”

While the price per gram on New Mexico’s regulated market remains high compared to the non-regulated market, Pear expressed confidence that dispensaries will grow more competitive as the market matures.

“It will slowly but surely continue to grow and take hold,” he said. “People want quality products that are safe, not stuff that’s grown by who knows who and showed up on the market and could be laced with stuff.”

The dispensaries under his purview had met with greater challenges, he said, in meeting the requirements of New Mexico’s new cannabis regulations and in staffing their stores.

“It’s not just a gold rush, like some may think,” he continued. “You still have to be able to run the business and be prepared for the challenges … and not everyone’s set up to do that.”

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Algernon D’Ammassa can be reached at 575-541-5451, [email protected] or @AlgernonWrites on Twitter.

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