ALBUQUERQUE, N.M. (KRQE) – Can everyone in New Mexico’s cannabis industry stay afloat? State officials told lawmakers Wednesday that while sales revenues are still high, issues like the oversupply of cannabis have made for a hazy outlook. State data shows New Mexico has about as many cannabis retailers as Colorado and officials say it’s making it hard for smaller ‘mom and pop’ retailers to survive.
“Just if you come down San Mateo, there is probably about 15 from Menaul to the end of where Osuna is, about 15 dispensaries,” says Julieta Neas, one of the owners of Amnesia Dispensary and Accessories, “At this point, when you look at the numbers through the RLD there is over 1,000 dispensaries. So, it’s, yeah, it’s affecting business.”
Neas is describing what lawmakers are now hearing about, the oversaturation of the state’s cannabis market. “While the revenue, the total revenue for the industry continues to grow, the average cart size and the average monthly revenue per licensed retailer continues to decrease,” says Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce. Lewinger says there are 1,021 cannabis retailers—roughly the same as Colorado, which has nearly three times New Mexico’s population.
“New Mexico is very likely overproducing cannabis,” Lewinger says.
New Mexico’s cannabis chamber says there are ten producers in the state supplying almost half of what local consumers are demanding. That, and the continued illegal sale of cannabis is putting small retail operations in a tough spot.
“40% of reported sales, these are 603 operators- who reported sales in August, 40% of those sales had less than $25,000 a month in revenue, the average was $11,660,” Lewinger says, “A cannabis business cannot survive on $25,000 a month in revenue.”
“What this means is, the majority of the mom-and-pop businesses are not going to be able to survive,” Lewinger says. Lewinger says these ‘mom and pop’ shops account for 40% of operating storefronts.
Officials from the state’s Regulation and Licensing Department and the Cannabis Chamber of Commerce are asking for legislative help to better regulate the industry. “We want an opportunity for businesses to be able to come into this industry ten years down the road and still be able to carve out a lane. And right now that overproduction is going to be a challenge for that,” Lewinger says.
He says September is the first time New Mexico’s total cannabis sales decreased—by two percent for adult use and nearly seven percent in medical sales. State officials say this may be a sign the industry is leveling out.
Lawmakers will meet again in January for a 30-day session. Some suggested letting the Regulation and Licensing Department seize and destroy unlawful cannabis products, and to address how the state comes up with the cap on how many plants producers can grow.