New Mexico

insights

October 23, 2023
Notable Players

A Deeper Look At This State

Regulatory Framework

New Mexico’s adult-use program features unlimited licensing, microbusiness categories, and a license-fee discount for retailers that accept cannabis business products on consignment from a microbusiness producer. The unlimited license structure and requirement of vertical integration means operators in the state have ample opportunity to build highly profitable operations.

The state benefits handsomely tax-wise; purchases of recreational cannabis carry a 12 percent excise tax on top of the state’s 8 percent sales tax. Beginning in 2025, the excise tax is scheduled to increase by 1 percent each year until it reaches 18 percent in 2030.

Notable Market Activity

February 2022 | Verano announced acquisition of Goodness Growth for $413M, growing their footprint into the New Mexico market

March 2019 | Vireo acquired Red Barn which operates two dispensaries in addition to cultivation/processing

What's the Play?

Since adult use sales kicked off in the state in April 2022, growth has been steady. Sales have reached just under $48MM in July 2023 and continues to inch up each month. It took some time for production to meet demand in the state but as more producers have come online, wholesale price have continued to fall; they are now almost 1/2 of what they were in April 2022.

There still exists some opportunity, however, the state has become quite saturated and MSOs have built out impressives infrastructures already. Investors should look to consolidation opportunites if they are looking to enter the state.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~2.1MM

21+ Population

~1.5MM

Annual Tourists

~
39
MM

Medicinal Legalization

2007

Adult-Use Legalization

2021

First Adult-Use Sales

2022

MMJ Patients

~101K

Monthly Revenue

~$47.2MM

Cultivation Cap

1,750 Plants

Cultivation Licenses

307/No Limit (Operational/Limit)*

Retail Licenses

498/No Limit (Operational/Limit)*

Retail License Cap per Operator

Unlimited

Vertical Integration

Required

Delivery

Allowed

MMJ Qualifications

Less Restrictive

Adult Population/ # Retail Licenses

~3.0K

Accepts Out of State MMJ

Yes

MMJ Patients / # Retail Licenses

*35 vertically integrated businesses that are each allowed to open unlimited storefronts.

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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West Palm Beach
Shit We Don't Know

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