Arizona had about 73 adult-use dispensaries licensed when recreational sales began at the start of 2021.
Colorado had 156 licensed retail stores in 2014 when their sales began, according to data from the state’s Marijuana Enforcement Division.
New Mexico, meanwhile, has more than 200 retail premises across the state, Cannabis Control Division spokeswoman Heather Brewer told the Journal – and counting.
But the question is: Will New Mexico’s adult-use retail market become oversaturated?
That depends on who you ask.
Ben Lewinger, executive director of the New Mexico Cannabis Chamber of Commerce, said he isn’t concerned about the state’s adult-use retail market becoming oversaturated.
“New operators are going to bring healthy competition,” Lewinger said, adding that people entering the cannabis industry for the first time are living the “American dream.”
But ask Duke Rodriguez, CEO and founder of Ultra Health – the state’s largest vertically integrated cannabis company in the state – and he’ll give you a different response.
“It’s going to be the New Mexico nightmare,” Rodriguez said.
How many dispensaries?
The state is touting some 228 retail operations statewide as of Tuesday. A retail license holder can operate multiple storefronts on that license.
But pinning down the number of actual physical storefronts is tricky, and the official tally may be undercounting those premises.
When the Journal asked for detailed numbers on the amount of retail premises Albuquerque and Santa Fe currently have, the state sent a document outlining a list of premise locations from legacy operators and newly licensed cannabis businesses.
Making it tougher to navigate, the state’s licensing portal search doesn’t currently include all data for legacy operators and their retail premise locations. Robert Sachs, deputy director for CCD, said in an email that the licensing portal “is expected to be fully operational with all data (including legacy licensees) no later than early April.”
City of Albuquerque spokeswoman Maia Rodriguez, meanwhile, says legacy operators account for 48 storefronts in the city after checking data from the state’s Department of Health. Fifty-five more retail locations have received approval from the city, including some new locations from legacy operators and newly licensed retailers.
Ultra Health, meanwhile, has been tracking numbers on its own. Using data from the state’s licensing portal and accounting for legacy operators with retail locations across New Mexico, Ultra Health estimates that around 311 retail stores are currently licensed in the state. Of that number, 110 are in Albuquerque and 25 in Santa Fe, said Marissa Novel, chief marketing officer for Ultra Health.
“The saturation is mathematically verifiable now,” Duke Rodriguez said. “It’s not going to get better – it’s only going to get worse.”
Rodriguez estimates that with New Mexico’s population and the amount of retail locations statewide, “we are looking at about 12 months out having to pare back close to 100 plus locations.”
Brewer said the division doesn’t expect all to open come April 1.
“Licensees may choose to open some locations on April 1 and not open others until later this year,” Brewer said, adding that, “based on current supply data, the Cannabis Control Division is confident that there will be ample supply – without oversaturation – on opening day.”
Indeed, that is the case for Canvas Organics, who plans to open one store at a time, said co-founder Billy Giron.
Giron, who also opened CBD Boutique in 2015, said he and his business partner were approved for a retail license that will allow them to operate six locations across the Albuquerque area. But the plan is to start with one store, Giron said. The approval needed from the city for zoning delayed the construction and outfitting of their first store but they have remained positive throughout.
“It feels like we’re trying to pull off some sort of miracle right now to make it work,” he said.
Fortunately for Giron, Canvas Organics was able to find a supplier for cannabis products and will have a supply ready for when sales begin. He did say that finding cannabis flower and concentrates has been harder to find with the limited number of producers and manufacturers currently in the state but that as the months go on, he expects the amount of product for retailers to increase.
Rodriguez said smaller retailers have reached out “almost daily” asking for products to outfit their stores. For him, that signals a need for more supply.
“(State regulators) are not going to be the ones feeling the pain,” Rodriguez said.
Brewer said that the way the legislation was written prohibits CCD from putting a cap on future retail licenses and that an amendment to the legislation would have to be made. But it’s possible that the division can up the plant count again if needed.
“We have heard concerns ranging from fears of over saturation to predictions of dire product shortages,” Brewer said. “However, based on the state’s market analysis, the CCD believes that the current supply will be adequate for opening day and that the market will quickly settle into a balance of supply and demand that meets business and consumer needs.”