Number of Cannabis Plants Harvested Increases Significantly to Maintain Supply for New Mexico’s Medical Marijuana Patients
The latest official data from New Mexico’s medical market shows that the state’s patient count and sales volume continued to expand in Q2 2019 at rates similar to those documented in the prior quarter. Meanwhile, plant counts and plants harvested increased dramatically in Q2 as expanded crops allowed under an emergency rule raising the permitted production capacity of the state’s medical cannabis businesses remained in effect. However, while yields also grew quarter-over-quarter, they did so by a much smaller proportion than the number of plants that were reported to have been harvested. Still, New Mexico’s Spot Index trended downward in Q2 as new supply outpaced the continued steady growth in demand.
According to the latest quarterly report from the New Mexico Department of Health (NMDOH), the state’s patient count grew to 74,100 by the end of Q2 2019, up by 4.7% from 70,743 at the end of the prior quarter. The number of patient transactions recorded also increased, by 8.8% quarter-over-quarter, from just under 673,375 in Q1 2019 to 732,314 in Q2 2019. In Q1, New Mexico’s patient count grew by the same magnitude quarter-over-quarter, while patient transactions were up by 8.3% from Q4 2018.
The price per gram of flower purchased by patients declined to $9.92 in Q2 2019, down from $10.43 in Q1 2019. Average units purchased per patient in Q2 2019 increased slightly compared to the prior period, to 33.3 from 32.7. According to New Mexico regulators, “one unit of usable cannabis shall consist of one gram of the dried leaves and flowers of the female cannabis plant, or 0.2 grams (200 milligrams) of THC for cannabis-derived products.”
With more patients enrolled in New Mexico’s medical cannabis program in Q2 2019 and a higher average unit purchase per patient, the total number of units sold naturally increased. In Q2, patients purchased 2,466,503 units of product, up from 2,315,167 units in Q1, an increase of 6.5%. From Q4 2018 to Q1 2019, the number of units purchased by patients grew by over 21%. Overall, the significant uptick in sales volume recorded in Q1 of this year was maintained and expanded upon in Q2.
New Mexico regulators issued an emergency rule in early March allowing the state’s Licensed Non-Profit Producers (LNPPs) to grow up to 2,500 plants at any one time, up from the previous limit of 450. As a result, the number of plants in production in Q1 2019 increased by 77.9% from Q4 2018.
Cultivation capacity continued to expand in Q2, with 38,101 plants in production statewide, up by 62.2% from 23,493 in Q1. Still, the information notes that, on average, each of the state’s 34 LNPPs was growing 1,120 plants in Q2, far below the 2,500 plant limit in effect at the time. The new permanent rules adopted in New Mexico’s medical cannabis system have lowered the allowed plant count to 1,750 mature plants per LNPP.
Since the emergency rule expanding permitted plant counts to 2,500 was enacted near the end of Q1, expanded harvests took place in Q2. According to NMDOH, 9,488 plants were harvested in Q2, up by 43.5% from 6,610 in Q1. However, reported yields statewide only increased by 12.5%, to about 6,678 pounds in Q2, up from 5,935 in Q1.
NMDOH data shows that the on-hand supplies of dispensary operations at the end of Q2 2019 maintained the elevated levels achieved at the end of Q1. The state’s quarterly report shows that a little over 3 million grams (over 6,600 pounds) of flower and bud were in stock at the end of Q2, down marginally from 3.02 million grams in stock at the end of Q1. For context, at the end of Q4 2018, LNPPs in New Mexico had only 1.08 million units of flower and bud in stock.