New Mexico adult-use marijuana sales benefitted from a smooth, busy rollout as the first weekend of sales topped $3.5 million, according to the governor’s office. Sales on Friday, April 1, nearly doubled Colorado’s opening numbers following legalization.
Over three days, the total sales of $5,219,575.73 were split between adult recreational use at $3,522,811.27 and medical cannabis at $1,696,764.46. New Mexico’s population of 2.1 million made 87,773 individual marijuana transactions, but retailers expect that cross-border sales to Texans will significantly boost those numbers. El Paso’s nearly-one-million residents are only a two-minute drive away.
In fact, the opening weekend went better for New Mexico’s 225 licensed cannabis retailers than the first recreational marijuana sales in many of the 17 other states that have repealed prohibition.
Learning from the mistakes of pioneering states, New Mexico retailers didn’t experience any shortage of products to sell as the seed-to-smoker regulatory system worked well.
New Mexico has also made provisions to level the playing field so that disadvantaged and minority community members can compete with big cannabusiness and become independent cannabis retailers.
• Those provisions include:
• Easy access to licensing
• State subsidized loans
• Product-certification logos for cannabis from minority-owned cannabis businesses
The New Mexico Finance Authority is preparing a $5 million line of credit. They expect the average loan size to be $100,000.
More help is available in the form of expertise from established private sector business professionals like AdaptiveHR. Professional employer organizations (PEOs) partner with small cannabusiness entrepreneurs to provide business, legal, and human resources that fill gaps in owner knowledge at a fraction of the cost of hiring employees. PEOs help assure business success.
Cannabis consumers over 21 can now legally purchase up to two ounces of marijuana. That’s enough for about 60 small joints. Many of New Mexico’s first 225 retail cannabis licenses went to dispensaries already selling medical marijuana, but new outlets have appeared everywhere.
The state will license indoor and outdoor cannabis consumption areas for a fee. Designated areas in hotels, tobacco stores, and casinos will be available to cannabis users. Analysts project the imminent creation of 11,000 new jobs in the cannabis industry.
Home growers can have up to six plants or 12 per household for personal consumption. Indoor plants can yield about four ounces, while outdoor plants can produce half a pound or more.
Kelly O’Donnell, an economics professor at New Mexico State University, estimates that the value of New Mexico’s legal cannabis could reach $1 billion by 2026, which would produce significant tax revenue.
The opening weekend generated $672,000 in tax revenue. About 30% will be kept by local governments, while the remainder will go to the General Fund, which provides financing for public health, public safety, the courts, and hospitals.
The New Mexico retail cannabis tax rate will begin at 12% and eventually grow to 18%. State and local authorities can add a sales tax of 5% to 9% on top of the special marijuana tax.
Medical cannabis remains tax-free for qualifying patients.
New Mexico confidently expects to exceed $45 million in annual recreational marijuana tax income. Lawmakers haven’t decided where to spend this extra income yet.
The new marijuana laws are a breath of fresh air blowing through the judicial system. Approximately 155,000 marijuana arrests and convictions are now eligible for automatic expungement in the hopes of removing the social stigma and stain that hinders employment opportunities for many.
Courts have waived fees for individuals who want to expedite the expungement process, and the public prosecutor only has until July 1, 2022 to object.
Meanwhile, the smell of marijuana will no longer serve as probable cause allowing police to search vehicles and premises.
New Mexico is not limiting the number of adult-use cannabis business licenses it issues through the Cannabis Control Division (CCD). However, the application process takes time, and extensive documentation is required. Successful applicants will also need local business licenses and permits.
Here are the types of licenses available and the associated fees:
• Adult-use producer license — $2,500/year and $1,000/year for each additional premise
• Adult-use manufacturer license — $2,500/year and $1,000 for each additional premise
• Adult-use retailer license — $2,599/year and $1,000 for each additional premise
• Adult-use cannabis courier — $1,500/year
• Vertically integrated license for producer/manufacturer/courier/retailer — $7,500/year and $1,000 for each additional premise
• Producer microbusiness (up to 200 plants) — up to $1,000/year
• Integrated microbusiness — up to $2,500/year
• Consumption area (no alcohol) — $2,500/year
• Research laboratory — $2,500/year and $1,000 for each additional premise
• Testing laboratory — $2,500/year and $1,000 for each additional premise
After applicants have assembled all the required documents and applied, the CDC will act within 90 days.
Small cannabusiness entrepreneurs fall into two broad groups: those without business skills and those with professional business experience.
The first group includes many disadvantaged people with a wealth of experience in the marijuana industry but a lack of hands-on experience with professional small business management and the labyrinth of laws, tax regulations, and business practices they will encounter when going legal.
Their lack of experience in dealing with government regulations, banks, and insurance companies, coupled with their having never managed professional human resources like accountants and legal advisors, can make it difficult for them to succeed.
The second group — those with the needed business knowledge — still recognize the immense value of using competent marijuana experts but are held back by the crushing expense of hiring in-house professionals.
So, both groups are tempted to try making do without the vital services needed to compete with big cannabis businesses. However, there is some good news: The much-needed professional help critical for a small cannabis business to survive is available for a reasonable price.
AdaptiveHR is fully dedicated to helping cannabusinesses thrive and prosper by providing a complete set of critical backroom services. We partner with cannabusinesses of all sizes to take care of:
Payroll and Tax Administration
Risk Management and Compliance
Time and Attendance (Section 280E)
Comprehensive EPLI Coverage
Access to Enabling Partners in your State
Cannabis entrepreneurs who partner with AdaptiveHR are free to let go of the time-consuming worries of back-end management and focus on making their cannabis business the successful enterprise they know it can become.
If you are part of this group, contact AdaptiveHR now.