Since the legalization of adult-use cannabis in the state last year, the question of how to open a dispensary in New Mexico has arisen more often. With just 123 dispensaries in operation statewide, new legislation allowing the sale of recreational cannabis has created an opportunity for cannabis entrepreneurs in the sparsely populated state to exploit the market.
Market research predicts an industry value of up to $1 billion by 2026, a massive increase from current figures. Industry experts also expect New Mexico to benefit from the limited marijuana market in neighboring Texas, which is the 2nd most populous state in the U.S. and yet to legalize recreational marijuana.
With the state setting an April 1, 2022 date for retail operations to begin, entrepreneurs have been lining up to open shop in New Mexico. Representatives from the state regulation agency recently reported that they had approved licenses for 228 dispensaries.
Can I open a dispensary in New Mexico right now?
Yes, you can open a dispensary in New Mexico. Any adult aged 21 and above who does not have a criminal conviction for a workplace offense, such as fraud or embezzlement, is allowed to apply for a retail license.
Medical marijuana was made legal in New Mexico in 2007 through the state legislature. Then, in April 2021, Governor Michelle Grishame signed into law House Bill 2, The Cannabis Regulation Act, which legalized recreational marijuana in New Mexico. The bill allows cannabis businesses to open dispensaries in New Mexico, although local governments hold the right to limit the number of cannabis retailers in their jurisdiction.
How do I open a cannabis dispensary in New Mexico?
Although the first recreational cannabis dispensaries in New Mexico are yet to open, there are readily available steps showing cannabis entrepreneurs how to open a dispensary there. Here are a few of them:
1 - Outline a clear business plan.
A business plan is an integral part of starting any business. For someone trying to figure out how to open a dispensary in New Mexico, it is not an absolute prerequisite, but it is vital for ensuring the dispensary’s success.
A good business plan should incorporate measures to help keep the dispensary compliant. It should also include information on financials, location, the management team, a market and competitor analysis, and projected revenues, among others.
2 - Review state and local regulations on cannabis.
Before opening a dispensary in New Mexico, take a look at the relevant state and local laws regarding cannabis. Although, unlike states like New York, New Mexico does not permit towns and cities to outrightly prohibit cannabis, local authorities are allowed to restrict the number and locations of cannabis dispensaries.
3 - Secure funding.
The costs of opening a dispensary can be overwhelming for an entrepreneur. A crucial step in the process of opening a dispensary is securing funding from investors. The state of New Mexico has also set up a loan program offering business loans of up to $250,000 to small scale cannabis businesses in an effort to emphasize socioeconomic fairness.
4 - Acquire seed-to-sale software.
Depending on the needs of your business, you may need an all-in-one seed-to-sale software solution to help with the day-to-day monitoring of your products. On the other hand, you could purchase inventory management software or a reliable cannabis POS system to carry out the same tasks.
5- Apply for a license.
After you have carried out the above steps, you can then begin the application process for a cannabis retail license.
What are the current cannabis laws in New Mexico in 2022?
The Cannabis Regulation Act was signed into law in 2021, and the following provisions were made:
- Adults aged 21 and above are allowed to possess and purchase up to 2 ounces of cannabis, 16 grams of cannabis extract, and 800 milligrams of edible cannabis outside their private residence. They can possess a larger amount if it is stored in a locked space in their residence that is not visible to the public.
- Individuals 21 and older can grow up to 6 cannabis plants at home, with a limit of 12 plants per household.
- Recreational sales of cannabis became legal from April 1, 2022 onwards.
What type of cannabis retail license do I need to open a dispensary in New Mexico?
The Cannabis Control Division is in charge of regulating and approving cannabis retail licenses in New Mexico. Currently, there are several license types available to cannabis businesses, depending on their role in the seed-to-sale cycle.
To open a dispensary in New Mexico, you will need a New Mexico cannabis adult-use retail dispensary license, with an annual license fee of $2,500, and an additional $1,000 annually for each licensed location.
How do I get a cannabis dispensary license in New Mexico?
The process of applying for a dispensary license in New Mexico can be completed online via the CCD website. There are several prerequisites you should fulfill before applying, including having a social and economic equity plan, proof of age, and a detailed site plan.
For further guidance on the requirements for license application, check out this CCD retail application checklist.
How much does it cost to open a dispensary in New Mexico?
The startup costs for a dispensary in the U.S. can range from $150,000 to $2 million. Cannabis entrepreneurs in New Mexico will find themselves on the lower end of that range, with costs ameliorated by lower than average license fees and favorable real estate conditions. However, the amount of money you will spend on setting up your dispensary will also vary depending on the size, location, and the range of services.
How can you keep your dispensary compliant in New Mexico?
The key to keeping your dispensary compliant is remaining updated on state and local cannabis rules and regulations. This can be done with the help of a legal team and state-approved seed-to-sale software or a cannabis retail POS system.
What is the track and trace technology used in New Mexico?
The state of New Mexico is currently partnering with BioTrack as its official cannabis traceability system. Although the system is currently monitoring medical cannabis only, it is expected that it will also be used for recreational cannabis once regulations are established and sales commence.
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