Cannabis sales remain steady
Grow operations still slow to take off in Taos
New Mexico recorded $40.6 million in cannabis sales in August, with Taos County bringing in over $586,000, numbers that reflect the continued rapid growth of the new industry following the state’s activation of recreational cannabis sales on April 1.
Taos has also seen an influx of retail stores, with a total of six dispensaries currently open for business, and another five approved by the state’s Cannabis Control Division. But while dispensaries have popped up quickly, production licenses still take a long time to approve, according to cannabis industry professionals.
“The industry has been very slow going, even though we’re six months in,” said Barbara Crawford, owner and CEO of Southwest Cannabis, the longtime Taos-based medical cannabis grow that now also offers products to recreational consumers. Crawford is the only producer in Taos who was growing cannabis prior to the legalization of recreational use, and she acknowledged that gives her business an edge amid the growing competition.
Speaking to the slow growth of Taos’ cannabis scene specifically, Crawford said there remains a large illicit market “that has been active for a long time and continues to be active.”
She also pointed out just how hard it can be to grow cannabis. “The truth of the matter is, this isn’t as romantic of a business as everybody thinks it is. There are a lot of issues that I think are a problem for the program in Taos,” she said, noting unnamed dispensaries which may not be putting cannabis into the state monitoring system (BioTrack THC) properly.
“There’s a different problem in every city,” said Crawford, who currently operates nine dispensaries throughout New Mexico, including two of the six dispensaries in Taos: Southwest Cannabis and Taos Cannabis Co-op.
Larry Costa, co-owner of Sierra Madre Med & Rec, located about 1 mile south of Southwest Cannabis at 1350 Paseo del Pueblo Sur, said business has been slower to get off the ground than he had first imagined. Costa partly blames ongoing road construction on his street.
“It’s been kind of hard to find us with all the road construction going on out front,” Costa said, noting that most customers have found them through Weedmaps, a dispensary locating app and website.
“We’re kinda just trying to hang in here,” he said. “We don’t have all the money like these other places.”
Costa said he has a draft application into the state for a grow operation, but is still waiting on the state engineer to approve it. For now, he is sourcing cannabis from established growers who have been operating in the medical industry for several years, but said even they appear to be experiencing a bottleneck. “I haven’t heard of anything from some of the new growers,” he said. “A lot of them haven’t got products yet, or they’re waiting on the state.”
And just down the street from Sierra Madre is Dreamz dispensary, which is part of a statewide chain of dispensaries owned by father and son John and Cody Fisher. Vice President of Operations Brittney Stone said their Taos location has seen an uptick in business over the summer. But, like Costa, Stone said her company has been sourcing its product from established medical grows while they wait for other grows to for
malize. She’s also waiting on their 16,000-plant facility in Deming to produce its first crop.
Finding those connections wasn’t easy at first, however. “It’s been a little hit and miss,” said Stone. “Especially the very first flower that we got was really not up to my standards, and I ended up pulling all of it from the shelves, which meant we were totally out of flower for a while.”
While it may sound drastic, Stone emphasized that she “would rather not sell anything than sell something that I don’t stand behind as a stoner myself.”
Like Crawford, Stone said it would take time before Taoseños see top-quality, locally produced flower on the shelves. “I think any real grower knows that until about the third or fourth turn around, you’re really just dialing in — in a new environment, new methods, things like that,” she said.
Currently, customers and retailers are paying a premium for their cannabis due to supply issues. Stone said she has paid as much as $3,000 for a pound of flower, compared to $800 a pound in Oklahoma, where she previously worked. However, she said the high prices won’t last forever. “The market will correct itself and hopefully meet somewhere in the middle of what we have right now in New Mexico and what they have in Oklahoma.”
Andrew Vallejos, director of the Cannabis Control Division, said it’s all a matter of supply and demand, explaining that as producers jump through the various hoops to get fully licensed, prices should begin to fall.
“When it comes to grow operations, there’s just a few more requirements that you need to have in terms of security cameras, access to water and the facility itself. It’s a little bit more of a technical application process for grow operations,” he said. “Retail operations are pretty straightforward.”
Vallejos said the CCD has approved over 1,000 licenses of all types and approximately 1,500 approved “premises” (A licensee can have several premises under one license). He added that 224 applications are still pending.
“We don’t certainly anticipate that there’s going to be a new surge of 1,000 grow operations or anything like that,” said Vallejos. “I think most people who are interested in the market have gotten into the market.”
Vallejos acknowledged that many of the pending applications are for producer licenses. He said that the established medical producers are providing the bulk of the products to new dispensaries. “Some of the pending applications are still waiting on their water. Some are missing application information, and some are just pending payment for plant counts,” he said.
Regardless, Vallejos said there has not been a product shortage so far.
“The sales are pretty steady. We haven’t heard of any shortages for medical patients that we’ve seen in other states,” he said. “In most states, you see a big jump the first month, or the first couple months, and then it comes back down. In New Mexico, it sort of came out of the gate at a certain level, and has pretty much stayed there … The consistency of the sales is sort of an indicator that it’s a pretty healthy economy, both on the medical side and the adult-use side.”
However, he acknowledged that there is a lot that remains to be seen. “Not every business that starts in a new industry is going to make it. And so the markets kind of have to determine a lot of that stuff,” he said. “It’s just that economic dance of a new market.” Crawford agreed. “There’s going to be a shakedown over the next two years, basically,” she said. “The mightiest money will make it, and then a lot of people that took their family’s savings, mortgaged homes, some of these people are not going to make it, and it’s going to be ugly.”