New Mexico Offers a Big Opportunity for Cannabis Entrepreneurs
State leaders already have doubled the amount of weed growers can produce in anticipation of demand when recreational sales start in early 2022
Of all the states that have recently legalized cannabis, New Mexico offers a program with some unique aspects that may work well for cannabis entrepreneurs. That includes a provision that does not limit the number of licenses the state issues for businesses related to medical or adult-use cannabis.
As with officials in many states in the West, those in New Mexico have embraced marijuana from the outset. The state took a great deal of time setting up a diverse system that focuses on social justice. New Mexico has the largest percentage of Hispanic residents in the U.S., about half of the total population. They also have a large Native American population.
Gov. Michelle Lujan-Grisham greeted the official first day of legal marijuana this summer with a celebratory press release. She called it a “landmark day, a huge step forward both for social justice and economic development in our state.”
She added the new laws will stop “the disproportionate criminalization of people of color for cannabis possession,” launch a new profitable industry for the state and result in millions going into state and local government coffers through taxes and fees.
State leaders also announced that they would allow cannabis producers to double production amounts in anticipation of huge demand when sales start next year.
Provisions help businesses
Since late June, people in New Mexico can possess and use cannabis. The law allows New Mexicans to have two ounces of cannabis, 16 grams of concentrates, and grow up to six mature plants for personal use at home.
The law also requires the issuance of licenses for cannabis businesses by Jan. 1, 2022. Recreational cannabis sales are expected to start by April 2022.
There are no set limits on the number of cannabis business licenses it may grant. It also sets no limit on the number of facilities that a licensee can open. An advisory committee can recommend that the state stop issuing licenses only if “market equilibrium is deficient.”
Licenses are available for producers, manufacturers, and retailers and a “vertically integrated cannabis establishment” that offers a combination of the three (as well as a courier business).
Unlike other states, New Mexico does not allow local governments to ban marijuana businesses within their boundaries. They may use zoning laws to limit the number of businesses and also ensure they are kept a distance from schools, daycares and other cannabis businesses.
New Mexico also has designed the law to allow those without large capital reserves to start in the cannabis industry through a microbusiness. The state defines microbusinesses as those that involve a person who:
- Produces cannabis at a single licensed location with less than 200 mature plants on site at any time
- Manufactures cannabis products at a single licensed premises
- Operates only one retail establishment
- Couriering of cannabis products to qualified patients, primary caregivers, reciprocal participants or directly to consumers.
Linda M. Trujillo, superintendent of the state’s Regulation and Licensing Department, told KRQE in Albuquerque that state lawmakers drafted the legislation “to try to ensure that small entrepreneurs — including producers, small manufacturing plants, [and] retailers — had an opportunity to enter the market without a huge overwhelming investment. I believe that this is one avenue of diversifying our economy.”
The combination of unlimited licenses, the inability of cities to ban cannabis-related businesses, and the ability to launch a microbusiness make the state an area worth exploring for cannabis entrepreneurs.