A Snapshot Of America's Medical Marijuana Markets: New Mexico

New Mexico's medical cannabis program was signed into law in 2007. In the years since, the market has grown — and teetered on the verge of passing adult use legislation. 

The effort to expand access to adult use in the Land of Enchantment appears promising. The movement has garnered the support of Gov. Michelle Lujan Grisham, who tweeted in February: "we can get in on the ground floor or we can try to play catch up."

A recreational marijuana bill fell flat in the state legislature this year, leaving cannabis advocates to look toward the future. 

In the meantime, the state's medical market appears to be growing and improving.

The state generated $106 million in medical spending in 2018, a number that's expected to rise to $141 million by 2024, according to data from Arcview Market Research and BDS Analytics. 

If adult use laws were to pass in New Mexico, the firms forecast that spending could reach $429 million by 2024.

In 2019, the state totaled $129 million in sales while expanding enrollment 19% for a total of more 67,000 patients. 

Issues, Optimism Remain In New Mexico 

New Mexico's cannabis market continues to mature but has shortcomings that include product shortages and an underdeveloped infused product market, Kim Rael, president and CEO of culinary tech company Azuca, told Benzinga. 

Rael, whose work includes a position on University of New Mexico's Board of Regents, the state Board of Finance and the International Women's Forum, highlighted positives for the market that come from government leadership.

"The good news is that our new governor and her appointees that oversee the medical cannabis program in New Mexico understand and enthusiastically support the growing industry."

Business competition is at a high in the state, said Paz Romero, marketing director for Minerva Canna and its several dispensary locations across the state.

"Over time, competition has really humbled the market."

While noting that a cannabis business can still profit, Romero said the competition from the dozens of dispensaries across the state makes earnings less lucrative than they once were.

The influx of dispensaries has created fears of a race to the bottom in the sector. In addition to shrinking earnings, additional operating and marketing costs associated with a growing brand cut into profits, said Romero.

Azuca's Rael said that cannabis regulations that have shifted over time "are always a challenge for operators." 

Another issue raised by Rael is the state's cap on plant supplies, which she said harm product availability and price.

It's far from a new issue. The state passed emergency rules in 2019 to allow each grower to cultivate up to 2,500 plants. The rule was valid for only 180 days; by August 2019, cultivators were limited to just 1,750 mature plants.

New Mexico's 2020 Outlook 

A failure to pass adult use laws was just one issue to arise in the new year.

The start of 2020 saw environmental concerns raised, as some are worried that medical cultivators use an excessive amount of water. 

A Court of Appeals decision offered potential relief by approving tax deductions on prescription cannabis.

New Mexico are ending medical sales to nonresidents, agreeing to phase the program out by the middle of 2020.

The decision came just a week after the state had allowed nonresidents to sign up. State officials said the decision created possible room for trouble with federal agencies.

While New Mexico won't allow out-of-state residents to sign up for a license anymore, New Mexico will begin allowing reciprocity starting July 1. 

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