New Mexico is now among the 30 plus states in the United States to have decriminalized marijuana for medical and recreational use. And applications are now being accepted from individuals interested in becoming legal marijuana retailers and dispensary owners licensed by the cannabis regulatory body of New Mexico. Read How To Open A Dispensary In New Mexico for more details.
The best thing to do now is to understand, how to open a dispensary in New Mexico. In this blog, we will walk through the regulatory compliances, current status, license requirement, and legalization terms so that you know all about the requirements of opening a dispensary in New Mexico.
Can You Open a Dispensary in New Mexico Right Now?
Yes, you can.
There are 476 approved retail premises in New Mexico since the start of adult-use recreational cannabis sales in April, 2022. That is 30% more than Colorado reported at the one year mark of its recreational market.
There have been thoughts on if the state wants to slow down things, it could set a cap on the number of licenses approved. However, the idea of putting a quota on licenses has been done away with.
Also, if you want to open a deli-style store in Mexico, please be aware that this cannot be done under a basic cannabis retailer license. Individuals who want to sell cannabis flowers through deli-style must obtain a manufacturer’s license along with a retailer’s license. They also need to seek permission from the municipality to open a deli-style store in a particular location.
How to Open a Dispensary in New Mexico
The New Mexico recreational market is expected to be a wide open market like Oklahoma. There are no limits on the total number of licenses and cities aren’t allowed to ban cannabis businesses, they can only set limits on the density of such businesses.
According to a recent report published by KRQE, analysis suggest that the market for legalized cannabis in New Mexico will range from about $342 million to $1 billion by 2026. The data has been calculated from a year after the new law has been established.
The exact order of these steps is up to you.
Review the Laws and Requirements
They’re here and they’re long and boring. Enjoy! It’s best to inflict this assignment on your legal counsel if you have one (and you should have one anyway to review all your documentation throughout the process). Make sure there’s nothing that disqualifies you from starting a cannabis business, including being convicted of certain felonies or having a past cannabis license denied or revoked.
Put Together a Business Plan
New Mexico doesn’t require you submit a business plan as part of the application process like some other states, but it’s still a good idea to put one together, even if the only person that ever reads it is you. This will help you organize your thoughts and put an overarching plan for your business together.
It should cover:
- Where you intend on locating your dispensary or dispensaries
- Who (in general or specific terms) you’re going to hire or partner with to help you start and run the business
- An analysis of the market, your competition, and how you’ll set yourself apart from them or establish your niche
- How you’re going to fund everything
- How you’re going to turn a profit, or at least give yourself enough money to live on and keep the business going
- Where your products are going to come from (distribution platforms like LeafLink and Leaf Trade can help with this)
- Marketing plan – how you’re going to get people aware of your new dispensary/ies and get them to show up and buy
- An approximate plan and timeline for everything
Line Up Your Funding If You Need It
Between application, licensing, and legal fees, real estate costs, construction, interior design, IT setup, marketing, and purchasing all your products at wholesale, you’re probably looking at at least $100,000 in startup costs. If you don’t have that saved up somewhere you should probably look into securing some funding from a liberal-minded bank, private investment firm, or friends and family. You don’t want to waste your money on application fees for no reason.
Confirm Local Approval & Lock Down a Location
Before your license can be approved you need to get proof from your municipality that they approve of your business’s location. If your city hasn’t explicitly set up approved zoning for dispensaries you’ll need to get a letter of approval from the city government. At the same time you’ll want to lock down a location with your real estate broker. Make sure it’s at least 300 feet from schools, churches, and the like.
Put Together Your Application & Submit
The documents you’ll need to have ready include:
- A social and economic equity plan describing your plan “to encourage economic and social diversity in employment”
- Proof of age – copy of your driver’s license, passport, or similar federal or state document
- A detailed site plan/diagram that includes camera locations, any cultivation areas, and a description of the purpose of each room
- $2,500 annual fee
- $1,000 annual fee for each licensed premises
Get Set Up, Get Your License, and Launch!
We at Cure8 specialize in cannabis retail rollouts and have performed dozens ourselves. Let us know if you need any assistance! We can handle all the tech aspects of your rollout including POS selection and setup, surveillance system setup, IT hardware procurement, and network and back office IT setup. And we have tons of great partners that can help with all the other aspects of your rollout, including construction, physical security, legal advice, and marketing and advertising.
Other Useful Info
New Mexico legalized medical cannabis back in 2007. It allowed for up to 35 vertically integrated businesses to grow, process, and sell cannabis products. Though they could open as many dispensaries as they wanted, up until 2015 these businesses could only have up to 150 plants and seedlings total.
The state subsequently raised the maximum number of plants for MMJ producers to 450 in 2015, to 1,750 in 2019, then finally to 10,000 and then 20,000 in 2021.
Over the six full years from 2015-2020, the cannabis market in New Mexico grew from just 40 dispensaries selling around $27 million in total products to over 150 dispensaries selling around $200 million in products.
New Mexico legalized recreational marijuana in April 2021. Applications are being accepted for new cannabis dispensaries since January 1, 2022, according to the state’s Cannabis Regulation Act.
Current Cannabis Market in New Mexico
For now, New Mexico has around 476 licensed dispensaries. The market size was estimated at 97 million dollars in 2016, has been rapidly growing since then.
Adult use or recreational cannabis sales has increased by 3% over the month, since regulated sales of cannabis opened for adults on April 1, 2022.
The top five cities, that also topped July 2022 sales, accounted for 61% of the total market in August:
- Albuquerque ($14.6 million)
- Santa Fe ($3.5 million)
- Las Cruces ($3.3 million)
- Hobbs ($1.7 million)
- Rio Rancho ($1.6 million)
The current New Mexico medical dispensary market is dominated by native in-state chains, sort of like Florida though on a smaller scale and without the chains using the state as a springboard to becoming a multi-state operator. Ultra Health in particular has the most stores in the state by far, with over 28 operating as of January 2022. It’s also the most politically active, having sued the state on several occasions over their cultivation limits, testing requirements, and other matters.
Other key in-state players include (these location numbers are from the company websites and may not be accurate or up to date):
Pecos Valley Production – 13 active
PurLife – 11 active
Oso Cannabis Co. – nine active dispensaries with one coming soon
Everest Cannabis Co. – seven active
Minerva Canna – six active
Cannabis Taxation In New Mexico
Sales of medical cannabis to qualified patients are exempt from excise taxes. However, there is already a 12% excise tax on non-medical sales. This is in addition to the usual gross receipts tax that companies must pay.
The state sales tax in New Mexico is 5%, the highest local sales tax rate is 4.3%, and the average state and local sales tax rate is 7.8%.
Other Cannabis Licenses You Can Apply For in New Mexico
Prefer something different than a dispensary? You’ve got multiple different options.
This license will enable your business to manufacture and package cannabis products. However, your products must be tested by an authorized cannabis testing lab.
Cost of License and availability: The license will cost you up to $2500 per year and $1000 per additional licensed premise. It is available since January 1, 2022.
Cannabis plants can be grown and cultivated if you possess the cannabis grower’s license. You can also sell cannabis goods wholesale and transport unprocessed cannabis products to other cannabis businesses if you have this license. Cannabis testing labs are required to test products.
Cost of License and availability: It’s $30,000 if you’re growing 150 plants or fewer. For every 50 plants, it’s an additional $10,000. The license is available to apply to since September 2021. The application fee is set at $10,000.
Cannabis Delivery License
You can transport cannabis to patients, caregivers, and direct consumers with a delivery license.
Cost of License and availability: $1500 annually and $1000 for each additional licensed premise. License is available to apply since January 2022.
Cannabis Consumption Lounge
A cannabis consumption lounge is a location where cannabis can be consumed in accordance with the Cannabis Control Department’s laws.
Cost of License and availability: The cost of a consumption lounge license is $2500 annually. No set date as of now.
Vertically Integrated Cannabis Business
Multiple licenses can be combined under this license. A licensee can take on the following roles: a dispensary, courier, cultivator, and cannabis manufacturer.
Cost of License and availability: $7500 per year and $1000 for each licensed premise.
Integrated Cannabis Microbusiness
This license allows for the following:
- Cannabis cultivation on a single licensed premise, provided that the business does not have more than 200 mature cannabis plants at any given time.
- Manufacture cannabis products at a single licensed premise.
- Sales and transportation of only cannabis products produced or manufactured by that business.
- Operation of only one retail establishment.
- Delivering cannabis products to qualified patients, primary caregivers, or directly to consumers.
Cost of License and availability: $2500 annually with $50 for every additional licensed premise.
How Can Cure8 Help?
Cure8 is a leading tech solution provider. We provide cannabis businesses with the technical support that helps them overcome operational challenges while maintaining compliance with local and state regulations.
We keep your technology running seamlessly so you stand out amongst other dispensaries and scale more effectively.
You can check out our solutions and know more about our services by clicking here.