MJ Biz thinks there’ll be an inflow of Texans.
They write
New Mexico is set to roll out the nation’s newest adult-use marijuana market on April 1, with a focus on providing plentiful opportunities to small local businesses in the first state to establish an adult-use industry next to Texas.
Sales are expected to hit $400 million within five years, with New Mexico marijuana businesses likely benefiting from neighboring Texans driving across the border to buy recreational cannabis products.
The nation’s second-most-populous state is a veritable marijuana desert, with a small, limited medical marijuana market.
By contrast, New Mexico’s adult-use launch comes one year after state lawmakers passed a recreational legalization bill.
All licensed businesses can start sales on April 1, although many new producers and retailers are still building out their operations or getting municipal approvals.
As a result, the adult-use rollout for newly licensed businesses is expected to be more gradual than for existing medical marijuana operators.
New Mexico’s program features unlimited licensing, microbusiness categories and a license-fee discount for retailers that accept cannabis products on consignment from a microbusiness producer.
The program also has provisions to protect the environment in an arid state where water is considered particularly precious.
License applicants must prove they have a water source or rights to meet their needs, and state officials said energy-efficiency rules are in the works.
But the state’s social equity program isn’t yet in place, and, as in other new adult-use markets, concerns persist about potential supply shortages.
MJBizDaily projects that adult-use sales will build gradually from $100 million-$125 million in the first year to $325 million-$400 million by the fifth year of the program.
Texans are expected play a key role in powering sales. New Mexico retailers have set up shop near the Texas border.
“Our studies show that 40% to 42% of all adult-use cannabis will be derived from out-of-state purchases, particularly Texas,” Duke Rodriguez, CEO of the state’s largest cannabis company, Arizona-based Ultra Health, told the Santa Fe New Mexican last year.
