NEW MEXICO (KRQE) – Saturday, April 1, marks the one-year anniversary of the first legal recreational cannabis sales in New Mexico. There are already more than 600 approved retailer licenses, so is there still room in the industry?
The experts say ‘yes.’ Both state regulators and those in the industry still see opportunities on the horizon.
“I think the industry has plenty of room to grow,” said Linda M. Trujillo, the superintendent of the New Mexico Regulation and Licensing Department. Trujillo is guiding the Cannabis Control Division after acting director Andrew Vallejos announced his departure.
Trujillo points to the production side of the industry as an example: “Clearly all of our current licensees that are licensed producers are not growing at their maximum capacity,” Trujillo explained. “There’s a limited number of licensees that are growing 20,000 [plants, the maximum allowed for producers] and so, there’s a lot of room for current licensees to grow in capacity.”
Indeed, data from the Cannabis Control Division showed that only a handful of licensed producers have anywhere near 20,000 plants. When it comes to retail opportunities, some in the industry are optimistic that there’s room for expansion, but it might require thinking outside the box.
“Competitiveness is now starting to hit,” said Michael Sanchez. He runs the Electric Café in downtown Albuquerque, and KRQE News 13 has been following the development of his business since before sales began. “Everybody’s trying to stake out their claim as to why they should be the best . . . everybody’s worried about the prediction that 40% of all retail licenses will not make it through the first year.”
Sanchez has worked hard to get established over the last year, and he’s certainly faced competition given the fact that Harvest Foundation has a cannabis shop literally next door to Sanchez’s Electric Café.
Sanchez said that he’s been able to see progress by putting competitiveness with his neighbor aside. Now, with a collaborative attitude and grassroots advertising, he’s feeling more and more solid about his business, though he makes it clear that entering the cannabis industry isn’t easy.
Still, there seems to be enough opportunity in the industry to warrant expansion. Kevin Lutz, the CEO and managing partner of High Noon Cannabis Company, told KRQE News 13 that they’re hoping to boost their growth.
“We plan on expanding for sure,” Lutz stated. “When we’re done [with construction], we’ll be the second largest grower, square footage-wise, in the state.”
So, how is Lutz planning on beating out the competition while expanding? He said the key is price: “Lowest cost per pound. That’s what it boils down to.”