Cannabis Business Licensing in New Mexico

Within a week, applications to grow recreational cannabis in New Mexico received nearly 900 submissions. Applicants flooded the regulatory agency after medical marijuana operators in the state expressed concern about a shortage of cannabis when New Mexico's adult-use market launches in April 2022. Depending on the license type, cultivators can start growing up to 8,000 plants when permits are approved.

Program Details

Type of Program

• Medical

• Adult-use

Regulatory Agency

Medical:

• New Mexico Department of Health

• NMDOH controls the medical cannabis patient registry.

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Adult-Use:

• A newly created Cannabis Control Division (CCD) oversees the adult-use cannabis industry under the Regulation and Licensing Department (RLD).

• The CCD will administer the Cannabis Regulation Act (CRA) and the licensing and regulatory provisions of the Medical Cannabis Program created by the Lynn and Erin Compassion Use Act (LECUA).

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Market Population

• 2.1 million residents as of July 1, 2019, Census data.

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Annual Tourism

• The number of visitors to New Mexico increased by four million, reaching 38 million visits in 2019 from 34 million in 2015, a cumulative increase of 12%.

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• Governor Michelle Lujan is pushing for more money in the budget to restore the state's tourism industry post-pandemic in 2022. The New Mexico Tourism Department estimates that the $25 million annual investment in tourism promotion could shorten the recovery time to three years after estimating it could take up to seven years to recover fully.

Market Metrics

• Current Medical Sales

• $200 Million in sales as of 2020

Project Adult-Use Sales

• Based on industry projections, the New Mexico market for legal cannabis should generate $150 million by the end of the first full year in 2022. Projected sales of $425 million annually by 2026. However, University of New Mexico School of Public Administration professor Kelly O'Donnell, P.H.D. is even more optimistic, projecting $342 million by the end of the first year and $1 billion by 2026.

• MJ Biz projects first-year sales of $125 million and reaching $350 million by year 4.

History of the Market

1978

• New Mexico allows physicians to prescribe cannabis for medical use through a federally-approved research program. It was the first medical cannabis law enacted by any state.

2007

• Medical cannabis use was legalized by Senate Bill 523.

2019

• In July 2019, Democratic Gov. Michelle Lujan Grisham passed a law legalizing recreational cannabis.

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2020

• In July, New Mexico began allowing out-of-state patients to purchase medical cannabis within the state. The legislation permits patients from any state, the District of Columbia, U.S. territories, and New Mexico native tribes to purchase cannabis in-state. Source

2021

• February, the NM House passes HB2 to legalize recreational cannabis.

2021

• With the passage of HB2 in the 2021 special session, the enactment of the Cannabis Regulation Act (CRA) will be effective June 29, 2021, upon the signature of Governor Michelle Lujan Grisham.

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• In August, a New Mexico judge ordered that purchase limits for medical cannabis patients be increased to comply with the new recreational marijuana law approved by lawmakers.

• General Sentiment of Cannabis In This Market

• Polling shows that most New Mexicans support legalizing, taxing, and regulating cannabis for adult use, and a 2020 Gallup poll found that 68% of Americans support legalizing cannabis.

Available License Types

Medical

• There are no new current Medical Licensed Non-Profit Producers (LNPP) licenses available at this time.

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Adult-use

• Under act HB 2, business licensees are unlimited under the program. However, regulators can stop issuing new licenses if an advisory committee determines that "market equilibrium is deficient."

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Additional Resources

• Lawmakers sent legislation to establish recreational cannabis to Gov. Michelle Lujan Grisham during a special session that she had convened. Under the proposal, retail sales wouldn't start until April 2022, but the state Regulation and Licensing Department is getting a head start providing information to consumers and businesses.

Adult-Use Program Details

• Adults 21 and older can purchase and possess up to two ounces of cannabis, 16 grams of cannabis concentrates, and 800 milligrams of infused edibles. Licensed laboratories must test all products for contamination and potency.

• Home cultivation of up to six mature cannabis plants would be allowed for personal use, provided the plants are out of public sight and secured from children. Households would be limited to 12 total plants. Cannabis grown at home could not be sold or bartered.

• Advertising cannabis to people under 21 would be prohibited, with the use of cartoon characters or other imagery likely to appeal to children forbidden.

• The bill also prevents advertising from billboards or other public media within 300 feet of a school, daycare center, or church.

• All products would need to carry a state-approved warning label.

• Tribal governments could participate in the state's legal cannabis industry under legal agreements contemplated under the bill.

• The amended bill included language that would allow medical Cannabis patients registered in other states to participate in other states, but it failed to pass during the regular session.

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Adult-Use Important Terms:

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