How the New Mexico medical cannabis market is priming for expansion in 2019

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New Mexico medical marijuana, How the New Mexico medical cannabis market is priming for expansion in 2019

2019 is shaping up to be a good year for New Mexico’s medical marijuana market, with action favorable to the industry expected from judges, legislators and a newly elected pro-cannabis governor.

Developments to watch include:

  • A judge’s ruling in November will allow companies to grow more cannabis than the previous limit of 450 plants per business, though how much more has yet to be determined. An increase in the plant count would put downward pressure on MMJ prices, which could boost patient demand for the drug.
  • Governor-elect Michelle Lujan Grisham pledged that in her first 30 days in office she will increase the number of cannabis business licenses and support eliminating the plant count limit.
  • Proposed legislation backed by cannabis advocates would permit practitioners (doctors, nurses and physicians assistants) to recommend medical marijuana based on the practitioner’s discretion.

New Mexico MMJ rising

The state’s medical cannabis patient pool and industry have grown significantly.

  • There are more than 66,000 patients in the program – up around 40% from this time last year.
  • At the end of 2018, 81 dispensaries were operating compared with 67 at the close of 2017.
  • The state’s 35 MMJ companies are growing 15,570 plants, up from 13,444 the previous year.

The Marijuana Business Factbook 2018 estimated New Mexico’s sales for 2018 at $80 million-$120 million, and that number is expected to increase on the surging patient total.

But wholesale prices of cannabis are still high – well over $2,000 a pound for flower – and patients are paying a steep average of at least $10 a gram at retail stores.

The majority of available product on store shelves is still flower, while infused products and concentrates have room to grow.

Plant count limit lifted

MMJ companies took note in November when a district judge struck down the New Mexico health department’s 450-plant limit on producers as “arbitrary and capricious.”

The judge, David Thomson, stayed his decision for 120 days from the end of October to allow the health department to study the issue and establish a new plant count.

If the plant count is increased or eliminated, Duke Rodriguez, CEO and president of Bernalillo-based Ultra Health, expects to see the wholesale price of flower drop to $1,000-$1,500 a pound, with patients paying about $5 a gram.

“We anticipate that prices will fall,” he added. “But we believe that any decline in prices will be more than offset by an increase in demand.”

While it remains to be seen if the limit will be raised or eliminated altogether, Verdes Foundation CEO Rachael Speegle welcomes the opportunity to grow more, smaller plants.

Her Albuquerque company currently is growing “huge, ridiculous plants that are not so healthy,” she said.

Her large plants are grown in 35 gallon pots, yield 2½ pounds of flower per plant and are highly susceptible to microbials, according to Speegle. “It’s just a breeding ground for moisture and mildew and mold,” she added.

With more plants, Speegle hopes to see additional research and development so the state can catch up to other markets that are innovating and creating new products.

“Our cannabis products are still so far behind,” she added.

Verdes Foundation spends roughly $66,000 a month buying flower off the wholesale market to keep up with patient demand.

“We’re stealing plants from rural communities,” Speegle said. “We’re buying all of their wholesale.

“We’re not giving them an opportunity to distribute it to their communities.”

New pro-cannabis governor

Lujan Grisham, the incoming governor, has a long history with the state’s medical marijuana program. She helped implement the program while she was secretary of health from 2004 to ’07.

“She is a big supporter, an advocate,” said Patricia Monaghan, a cannabis business attorney based in Albuquerque.

The outgoing governor, Susana Martinez, is a former district attorney who wanted to repeal the MMJ law, according to Monaghan.

“You can’t get more black and white,” she added.

Monaghan pointed out that Lujan Grisham has also pledged to add more business licenses in her first 30 days.

“That will mean more jobs and tax receipts,” she added. “That will have a huge impact.”

Speegle is a little more tempered in her assessment of Lujan Grisham.

“I don’t know if she’s necessarily a friend of the industry as much as she’s a friend of the patients,” Speegle said.

Legislation on the horizon

Looking ahead, Democratic state Sen. Cisco McSorley is expected to introduce a bill in the Legislature in the coming session that will make improvements to MMJ affordability and accessibility, said Jessica Gelay, a Santa Fe-based policy manager for national advocacy group Drug Policy Alliance.

The bill, which is being drafted, would allow practitioners to have discretion when recommending MMJ.

Under the bill, the current list of medical conditions that practitioners can consult when recommending MMJ would still exist. But a practitioner could recommend cannabis for any other ailment, too.

That would likely lead to a large boost in the patient pool.

Gelay said the bill will be introduced in January and the outcome should be decided by the end of March.

“I believe that there will be an expansion of medical cannabis in New Mexico in 2019,” she said.

Bart Schaneman can be reached at