New Mexico could be in trouble when it comes to cannabis availability. In a recent hearing, experts stated that New Mexico will likely run out of recreational cannabis product within the first week of when sales go live.
Linda Trujillo, Superintendent of the Regulation and Licensing Department, spoke with the Economic Development and Policy Committee on July 26 and stated that it’s likely the state will experience what she refers to as “Krispy Kreme syndrome”—or high demand at the opening of a Krispy Kreme franchise.
Obviously referring to the future of cannabis sales, Trujillo said that they anticipate not having enough product to meet demand by the time the program launches next year. “It’s highly likely we will run out of cannabis in the first week, if not the first two weeks,” she said in the meeting. Her information is based on the first few weeks of other states’ recreational cannabis launch programs.
According to Trujillo’s estimate, the state would need to make sure it has grown 500,000 plants in order to meet the expected demand. It isn’t as easy as growing that amount though; Trujillo also noted that they should account for at least an 18 percent growth failure rate.
New Mexico Gets Ready for the Rush
The New Mexico recreational cannabis law officially went into effect on June 29, but New Mexico’s deadline to begin issuing cannabis licenses is September 1. However, the Regulation and Licensing Department has not released details about proposed retailer rules, nor have individuals been chosen to run the Cannabis Regulation Advisory Committee.
“I thought we would have done this months ago,” Trujillo said. “It’s a little disappointing to me that it has taken so long to do it.” New Mexican lawmakers who approved legalization in a special session earlier this year in April set up strict deadline windows for all aspects of the industry, including production, testing facilities and retail businesses.
The most recent regulatory movement included the Cannabis Control Division (CCD) altering plant-related rules. The CCD ruled to increase the number of plants that a grower may cultivate, from 4,500 to 8,000, as well as an extra 500 per year for four years, resulting in a total of 10,000 plants.
New Mexico is expected to collect $50 million in cannabis revenue during its first year, and will create approximately 11,000 jobs. While there won’t be any shortage of interest in cannabis, Trujillo’s main concern is how they can make access to the cannabis industry easier for locals who don’t have the finances to succeed in the industry.
“Access to capital is almost not available,” Trujillo said. “My fear is that individuals who are interested in getting into this industry are going to take measures like cashing out their retirement or taking out second mortgages on their homes or taking out their family life savings.”
Matt Muñoz, a partner in the Carver Family Farm business, who’s looking to become a cannabis microbusiness owner. According to Yahoo! Finance, he believes that the state should help residents looking to enter the industry by giving them first priority for business licenses. He defends his stance by pointing out the high costs of both obtaining a license as well as getting a regulated cannabis business up and running.
Availability is limited in New Mexico too. In Albuquerque, Muñoz says the vacancy rate is approximately two percent, which would make it both difficult and expensive for a resident to operate a cannabis business there. He also voiced concerns with the burgeoning black market for cannabis in Oklahoma, whose cannabis program has been live for three years now.
The next public hearing held by the Cannabis Control Division is set to be held on August 6. Meetings with numerous state organizations will continue to be held up to the point when recreational cannabis sales begin in April 2022.