Photo: Samuel Regan-Asante/Unsplash
New Mexico adult use sales are off to a fast start, with $5.2 million in combined adult use and medical sales in the first three days of the new recreational market being open. Adult use sales topped $3.52 million on opening weekend with the adult use share of total sales at 67.5%. Total weekend transactions were 87,773, with 57,890, or 66%, occurring in the adult use market.
New Mexico has 265 active adult use licenses as of this weekend and an uncapped licensing scheme that gives localities the say over where, but not if, retail shops can be located.
The table below breaks out adult use and medical sales, market share, and totals for the state’s first weekend of adult use sales.
New Mexico Spot price for cannabis flower rose as the Cannabis Control Division of the state’s Regulation and Licensing Department set the opening date for adult use sales last fall. From October 2021 though last week, per pound prices have risen about $360 on demand from new adult use stores and medical dispensaries expanding into adult use sales.
An on-the-ground assessment of retail cannabis sales and supply issues was provided by Steve Farmer, a retailer with plans to “go vertical” in the near term. Farmer contracted for flower supply well ahead of the adult use market’s opening weekend, but, in a post weekend analysis, said “the shortage of flower is real” and characterized his contracted supply as only “somewhat stable.” He noted that “ancillary product lines – concentrates and edibles – are scarce,” but “suppliers are catching up already.”
Farmer’s retail business is 90 miles from the Texas border and over the weekend he saw a “significant flow of Texans,” saying their “per visit spending numbers were even better than expected so far.” He praised New Mexico’s choice of BioTrack for its required plant and inventory tracking system, saying it has “wonderful data capture” that enables him “to track specific revenue streams.” Farmer’s first weekend sales exceeded his business plan projections, but he said, “let’s be real, it’s only day five.” Regardless, the first weekend of retail sales, especially the influx of customers from Texas, was encouraging.
Farmer analyzed New Mexico’s projections when making his business plan and found he “had two issues with the state’s numbers.” First, he thought they were “too low at the top level,” meaning he sees the state’s projected year one sales of $300 million as too conservative. For his location, the state projected eastern New Mexico would garner just 21% – or $63 million – of the state’s first year total projection, with Tucumcari in Quay County along the I-40 corridor accounting for 75% of the $63 million, or $47.3 million.
Secondly, Farmer, himself a Texan, thought projected revenue out of Texas was too low, saying “I know they’re low at the Texas percentage level” after spending nine months with the data and setting up his business plan. If the opening weekend is any indication, Farmer is likely correct in his revenue assessment for his specific area.