State: Legal cannabis sales hit $1 billion (with a B)

Mar. 5—Early in the decade, financial analysts studying a number of bills pushing for the legalization of recreational cannabis estimated the industry would produce up to $25 million in revenue in its first year.

To some, it sounded like Monopoly money.

But since the sale and use of recreational cannabis became legal in April 2022, even the most optimistic financial projections for the fledgling industry have been exceeded. As the two-year anniversary of legalization approaches, Gov. Michelle Lujan Grisham's office announced Tuesday marijuana-related products have brought more than $678 million in sales revenue.

Add an additional $333.1 million-plus in medical cannabis sales, and New Mexico has now cleared the $1 billion mark.

"This is a huge milestone for New Mexico's cannabis industry," the governor said in a news release. "Nearly two years after beginning sales, New Mexico is on the map as a premier hub for legal and safe cannabis and the thriving business community that comes with it."

Todd Stevens head of the state Cannabis Control Division which oversees the industry, wrote in an email Tuesday sales indicate "the industry is very much alive and well. We're looking forward to even more growth while continuing to support the licensed cannabis businesses who've made reaching this milestone possible."

Ben Lewinger, president of the New Mexico Cannabis Chamber of Commerce, called the news "a big watermark for our industry, and it arrived sooner than I expected."

In addition, the state reported the cannabis industry has raised about $75 million in excise tax revenue as of January.

Steady traffic has been at the heart of the industry's growth, store owners said.

Ian Aarons, who owns the Santa Fe dispensary Endo with some family members and friends, said sales at the shop have been relatively steady since it opened in May 2022.

Sales last month totaled just over $100,000 at Endo and the company has sold nearly $2.2 million in cannabis products to date, according to data from the Cannabis Control Division.

Aarons said he and the other owners of the shop, which includes a group of family members and friends, haven't put a focus so much on expanding as they have on providing high-quality cannabis flower and maintaining a small but loyal group of returning customers. The shop, located near the corner of Agua Fría Street and Siler Road, sells top-shelf products such as the brand Cookies.

Endo's busiest day is Friday — ranging from 100 to 150 transactions — when it offers discounted prices on its cannabis. Sundays are typically the slowest, Aarons said.

"I would honestly say it's been pretty consistent," Aarons said, noting that "we're satisfied with the customers we do have."

Still, Aarons said his business has felt the squeeze of market saturation in a region with a growing number of shops. That's something Eli Goodman, who owns Best Daze with his father, Len Goodman, has noted as well.

Goodman, whose company runs four shops in Santa Fe and is slated to open its tenth overall in Bernalillo in the coming weeks, said there was a "big boom" at first when sales started in 2022, but that a rebalancing of the market is coming into effect.

He said the previous business model for the medical program, which used to focus heavily on customers' needs, has changed to a place where "competitive pricing is the primary concept."

"The advantage was [that] before these stores came online, we could be more specific with customers ... than having to figure out how to compete with an onslaught of stores," Goodman said. "The pie has been split up but we've been faring well."

But Goodman said despite the hurdles, the overall picture has been positive.

"The fact that this much cannabis is flowing around New Mexico and the state is receiving tax dollars... is all amazing and fantastic," he said.

It wasn't always so certain, though. One of the initiative's biggest legislative boosters, Rep. Andrea Romero, D-Santa Fe, recalled hearing the early estimates of $25 million in sales and thinking, "we really hope" they hit that mark.

According to the news release, Albuquerque is the top city in the state for cannabis sales, recording more than $202 million in adult-use products since marijana was legalized. The small border community of Sunland Park, which adjoins parts of El Paso, reported $57.4 million in adult-use sales.

According to the Cannabis Control Division's website, Santa Fe recreational cannabis sales to date are pushing the $45 million mark while medical cannabis sales top $29 million.

The website says as of March 1, the state has issued 2,873 cannabis licenses across New Mexico, including 1,050 retailers, 878 manufacturers, and 459 micro producers. However, that does not mean all those license holders have opened businesses and are in operation.

As part of the original Cannabis Regulation Act, the state was required to start a public health advisory committee to study the impact of the law and the effect legal cannabis is having on the state. That committee is expected to create and release a report of its findings in December.