How To Open A Dispensary In New Mexico

Overview

Are you wondering how to open a dispensary in New Mexico? This page will keep you updated on the latest news and information about opening a cannabis dispensary business in the state. This includes helpful insights on what is next to come for the industry there.

At a special meeting on March 31th, 2021, the New Mexico House and Senate passed a bill to legalize, regulate, and tax marijuana for adults over 21. When Gov. Michelle Lujan Grisham signed the bill on April 12th, it became law. Possession of up to two ounces of cannabis and cultivation of up to six mature plants by adults is now legal. 

On December 28th, 2021, the Cannabis Control Division, which ensures that the rules and regulations for the marijuana business are followed, released final rules for retailers, manufacturers, and couriers.

April 1st, 2022, marks the first day of adult-use cannabis sales in New Mexico. Figures from the Cannabis Control Division show that adult-use cannabis sales had hit $475,000 by midday and had surpassed $1 million before 4:00 pm.

The Opportunity Size

Economist Kelly O’Donnell estimates that the market for legal marijuana in New Mexico will grow from approximately $342 million in the first year to roughly $1 billion by 2026. The figures represent a total demand for cannabis ranging between 34.19 and 177.22 metric tons.

Local Cannabis Laws & Restrictions

A county, city, or municipality will not be able to opt out of recreational marijuana sales in New Mexico. Under HB 2, the Cannabis Regulation Act, it is not possible for local governments to completely prohibit cannabis companies, as has been done in certain other states. 

Municipalities can utilize their local zoning power to limit the number of stores and their distance from schools, daycares, and other cannabis companies.For example, recreational cannabis cannot be sold within 300 feet of a school or childcare facility in Albuquerque, New Mexico. Stores must also be at least 600 feet away from one another.

Medical Marijuana

Senate Bill 523, also known as the Lynn and Erin Compassionate Use Medical Marijuana Act, was passed in 2007 and made medical marijuana legal in the state. Gov. Bill Richardson signed the legislation on April 2nd, 2007, and it became effective on July 1st, 2007.

Under the legislation, patients and their caregivers can jointly possess up to six ounces of usable cannabis. After acquiring a separate authorization, produce up to four mature plants and twelve seedlings of cannabis. 

With a physician’s recommendation, patients can use cannabis to treat specific medical ailments, including HIV/AIDS, cancer, glaucoma, and 25 other qualifying conditions. As of January 2022, 130,345 patients enrolled in the Medical Cannabis Program who are currently active. 

Up to 35 vertically integrated enterprises were permitted to cultivate, process, and sell cannabis products. Though they may operate as many dispensaries as they desire, until 2015, their entire plant and seedling count has a limit of 150. From 2015 to 2020, the cannabis industry in the state went from 40 to over 150 dispensaries.

Except for the maintenance of patient registration, control of the state’s medicinal marijuana program will be transferred from the New Mexico Department of Health (NMDOH) to the Cannabis Control Division (CCD) under HB 2.

Recreational Use Legalization

As mentioned above, New Mexico’s HB 2 legalizes and regulates cannabis for people 21 and older. New Mexico’s marijuana legalization law took effect in April 2021, with limited personal possession and cultivation officially becoming legal for adults 21 and older.

The Cannabis Control Division (CCD) will be set up in the Regulation and Licensing Department to license cannabis businesses. Applications may be submitted using the CCD’s online application system. Compliance officials will monitor and inspect retail outlets once the shops open and continue assessing licenses to ensure that license holders comply with the rules.

Cannabis Business Opportunities

A cannabis business needs the following three elements to be operational:

• a license issued by the Cannabis Control Division
• a certificate of occupancy issued by their jurisdiction 
• an approval certificate from the State Fire Marshal

It is important to have a thorough understanding of the applicable laws and regulations relevant to the commercial sale of cannabis before applying for a license.

New Mexico Cannabis License Types

The Division will issue licenses to the following categories of adult-use cannabis businesses:

Cannabis courier – Licensees are authorized to deliver items to customers or qualifying medical patients who have ordered them.

Cannabis producer – Licensed producers are allowed to cultivate anywhere from 201 to 20,000 plants for commercial purposes.

Cannabis producer microbusiness – The number of plants that a producer microbusiness may cultivate is capped at 200, and they are only allowed to operate in a single site; however, they are exempt from paying any plant or premises fees.

Cannabis manufacturer – Cannabis is purchased in its raw form by manufacturers, who then process it into edibles and other finished items like tinctures and cartridges for use in vaporizers.

Cannabis retailer – Licensed retailers are allowed to sell directly to customers who use their products for adult purposes.

Cannabis consumption area – Enables businesses to serve customers who may smoke, vape, or consume cannabis products while on the grounds of the establishment.

Cannabis vertically integrated establishment – The licensee is authorized to engage in the activities of production, manufacturing, sale, and delivery.

Cannabis integrated micro business – A licensee may engage in up to five different cannabis-related businesses (including production, manufacturing, retail sales, and delivery services) at the same physical site.

Cannabis testing laboratory – Labs conduct tests for pesticides, solvent residues, and potency.

Cannabis research laboratory – Permits cannabis research for both commercial and medicinal purposes.

In August 2021, the Division started accepting the application process for cultivator licenses. In December 2021, the Division began accepting license applications for other types of cannabis-related businesses. 

As of March 31st, 2022, the state’s Cannabis Control Division has approved 239 new cannabis business licenses. 56 are micro-producers, 51 are producers, 16 are manufacturers, and 116 are retail licenses.

There is no limit on the number of businesses that can get licenses or how many facilities a licensee can open for business. Several licenses may operate from the same location, and licensees may operate from multiple locations.

How much does it cost to open a dispensary in New Mexico?

A cannabis dispensary license in New Mexico costs a $2,500 annual license fee and a $1,000 annual fee for each licensed location.

Annual fees for an integrated cannabis microbusiness license range from $1,000 for two activities to $2,500 for five activities. The fees depend on the number of activities carried out under each microbusiness license.

Annual license fees for other cannabis license types:

• Cannabis Courier License – $250
• Cannabis Producer License – $2,500
• Cannabis Producer Microbusiness License – $500-$1,000
• Cannabis Manufacturer License – $2,500
• Cannabis Consumption Area – Up to $2,500
• Vertically Integrated Cannabis Establishment License – $7,500
• Cannabis Testing Laboratory License – $2,500
• Cannabis Research Laboratory License – $2,500

Here is more information about licensing and operational requirements for cannabis businesses in New Mexico..

Cannabis Dispensary License Requirements

• Contact details for the cannabis business and the applicant
• Verification that the applicant, dispensary owner, and any controlling individual are at least 21 years old.
• If needed, a statement from the New Mexico secretary of state that the applicant is in good standing with the government.
• List of all the people who have control over the business, a list of other licensed cannabis businesses, proof of the applicant’s or a controlling person’s legal name change, and proof of a background check.
• Comprehensive description of any prior convictions held by the applicant or any controlling person.
• Certification that the application has agreed to comply with all relevant federal, state, and local laws, as well as retail obligations, cannabis transport requirements, security protocols, and quality assurance standards.
• Verification that the applicant’s license has never been rejected, nor has it ever been suspended or revoked for any reason.
• Certification that the applicant does not possess a license under the Liquor Control Act.
• Certification that the applicant will abide by local zoning laws and has secured a current business license from the relevant municipal authority, or will do so before operating the cannabis establishment.
• Certification the applicant will have on hand a clear and precise map and description of the location of the real estate property or building that will be utilized for the cannabis business.
• Applicant’s strategy for promoting social and economic equity in the workplace.
• Verification that the data provided in the application is valid and correct.
• Settlement of any applicable fees.

As the state’s cannabis program, especially the recreational program, grows, we will inform you of any relevant news and legislation regarding opening a dispensary in New Mexico. By subscribing to our New Mexico Cannabis Mailing List (details below), you can stay abreast of any relevant news, including hard-to-find information and opinions based on New Mexico Legalization. This includes, but is not limited to, the following:

• How much does it cost to open a dispensary license in New Mexico?
• What are the requirements for a marijuana business license and opening a dispensary in New Mexico?
• What special programs will be available?
• And more