New Mexico


December 23, 2022
Notable Players

A Deeper Look At This State

Regulatory Framework

Adult-use sales began on April 1st; buyers made 58,000 adult-use cannabis purchases from Friday, April 1st through Sunday, April 3rd generating approximately $5.2 million. Sales are anticipated to hit $400MM within five years, with much of the profits powered by Texan neighbors quietly crossing the border to purchase the plant recreationally.

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.

Recently approved new licensees include 35 producers and 35 micro-producers (limited to 200 plants).

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 announces acquisition of Goodness Growth for $413M, growing their footprint into the New Mexico market

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

What's the Play?

All licensed businesses were allowed to begin sales on April 1st, but thanks to the state’s small, limited medical marijuana market, many new producers and retailers are building out operations and/or obtaining municipal approvals.

The demand is quickly outstripping the supply of cannabis in the newly adult-rec and medical market, driving flower prices higher and limiting supply for patients.  Expect flower prices to come down over time as new cultivation comes on line but that could take a while. 

The supply constraints and abundance of dispensaries for a state this size implies there will lower margins and some potential distress for retailers that haven’t secured their pipeline of products to stock their shelves.  New Mexico’s early days of adult-rec will be an example of well-prepared operators benefiting from scale and vertical operations.

Local operators should look to generate as much profit via first-mover advantage and otherwise take the organizational steps required to maximize value in a future sale. New operators within the state should focus on building scale and deepening their roots within the market.

Market Snapshot

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By The Numbers



21+ Population


Annual Tourists


Medicinal Legalization


Adult-Use Legalization


First Adult-Use Sales


MMJ Patients


Monthly Revenue


Cultivation Cap

1,750 Plants

Cultivation Licenses

260/No Limit (Operational/Limit)*

Retail Licenses

834/No Limit (Operational/Limit)*

Retail License Cap per Operator


Vertical Integration




MMJ Qualifications

Less Restrictive

Adult Population/ # Retail Licenses


Accepts Out of State MMJ


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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