New Mexico will become the 13th state to launch commercial adult-use cannabis sales in the U.S. with an April 1 opening day for licensed retailers, but one operator isn’t so sure the timing it right.
Citing concerns over a possible supply shortage, Ultra Health CEO Duke Rodriguez said he anticipates challenges in meeting the state’s forthcoming demand, with those challenging lasting for perhaps as long as 18 months before market conditions stabilize, dual CBS/Fox-affiliate KRQE reported.
One of the state’s larger operators, Ultra Health has 28 medical cannabis dispensaries in New Mexico. As of Feb. 28, New Mexico had 131,931 patients actively enrolled in its medical cannabis program, according to the state’s Health Department.
“What we have today is what we’re going to serve the market with,” Rodriguez told KRQE. “Is it going to be enough to serve the complete market? The answer is no. On day one, it’s going to be a challenge, and it’s going to be a challenge for maybe as long as nine to 12, 18 months.”
The planned retail launch comes nearly a year after Gov. Michelle Lujan Grisham signed adult-use legislation, House Bill 2, into law on April 12, 2021, following two days of a special legislative session.
Since several provisions of the law became effective on June 29, 2021, regulators and lawmakers have eyed certain changes to the program, such as an emergency rule that was enacted Jan. 13 to temporarily allow licensed producers to double their plant count to 20,000 mature plants in anticipation of launching adult-use sales.
The Cannabis Control Division (CCD), in charge of administering New Mexico’s licensing, taxing and enforcement regulatory structure for the adult-use industry, estimated that there were more than one million mature plants in the state leading up to next week’s launch, but Rodriguez found that estimate too high, KRQE reported.
Nonetheless, CCD officials remain confident that there will be a sufficient supply to serve the adult-use market.
“I cannot imagine [a prolonged market shortage] nor do we anticipate stores selling completely out unless they were only selling one product,” CCD Director Kristen Thompson told KRQE.
While New Mexico borders Colorado (to the north) and Arizona (to the west), which have already launched commercial adult-use cannabis sales, the southern and eastern parts of the state could see an influx of adult-use customers from Texas, where only medical cannabis with a 1% THC cap is legal.
As of this week, CCD officials have approved more than 225 licenses for adult-use retailers, including for existing operators in the medical market and new aspiring entrepreneurs.
In Albuquerque, the state’s largest city with more than half a million people, 58 retail locations and counting had been approved, as of March 25, according to the city’s Planning Department. The department requires businesses seeking to operate within the city to first obtain a state-issued cannabis license through the CCD.
As the licensing process continues, it is unclear how many of New Mexico’s approved adult-use retailers will be ready to open their doors April 1.