Key Takeaways

  • Cannabis law and regulations:
  • Licenses available:
    • Cannabis producer; cannabis producer microbusiness; cannabis manufacturer; cannabis retailer; vertically integrated cannabis establishment; integrated cannabis microbusiness; cannabis testing laboratory license; cannabis research laboratory license; cannabis courier license; cannabis consumption area.
  • Products legal:
    • Legally allowable product categories include flowers, extracts, edible products and topical products.
  • Taxes:
    • Adult-use cannabis sales are subject to a 12% excise tax until July 1, 2025, and then this rate will rise by 1% each year until it reaches to 18% beginning July 1, 2030.
  • Market:
    • In 2024, cannabis sales rose by nearly 6% from 2023 to reach $590 million, with adult-use sales accounting for 76% of all cannabis sold in New Mexico. Although total sales moderated slightly to $567 million in 2025, the adult-use segment continued to strengthen, accounting for 77% of total sales. Since April 2022, New Mexico cannabis market has exceeded $2 billion in total sales, of which $1.5 billion came from adult-use cannabis sales.

New Mexico Medical Cannabis

The Lynn and Erin Compassionate Use Act, enacted in 2007, permits the use of medical cannabis by New Mexico residents with certain severe medical conditions and establishes the broad regulatory framework for the state’s Medical Cannabis Program (MCP). To qualify for the program, a patient must have their diagnosis and need for medical cannabis certified in writing by a health practitioner licensed to prescribe and administer controlled substances in New Mexico and they must register with the state MCP. New Mexico’s law was updated in June 2019 (Senate Bill 406), changing the definition of “qualified patient” by removing the qualification that a patient be a resident of New Mexico and opening the New Mexico cannabis market to nonresidents.

Nearly half the patients in New Mexico use medical cannabis products to treat post-traumatic stress disorder, likely because it was the first state in the nation to list PTSD as a qualifying condition. New Mexico is the only state where chronic/severe pain is not the most oft-cited condition treated.

Beginning July 2020, New Mexico began to recognize medical cannabis enrollment cards from other states that have legalized medical cannabis use.

From December 2020 to May 2022, the number of patients enrolled in the program increased by 30% to over 135,000 patients, according to data from the New Mexico Department of Health. In December 2022, anxiety disorder was added to the program’s list of qualifying conditions for enrollment.

Total industry revenues increased from $86.2 million in 2017 to $105.8 million in 2018 and to about $130 million in 2019 according to the Marijuana Business Factbook. The state’s medical cannabis market reported sales of $203 million in 2020 and about $250 million in 2021.

In 2021, there were 79 active business licenses (35 growers, 34 microbusiness producers and 10 manufactures) to produce and sell medical cannabis in New Mexico through 53 dispensaries while the top five producers in the state accounted for about 55% of the total sales.

Since hitting the peak of 135,388 patients, the number of patients enrolled in New Mexico’s medical cannabis program began to fall as adult-use cannabis sales started in April 2022. As of January 2026, there were 65,215 registered patients in the state.

New Mexico Recreational Cannabis

In April 2021, New Mexico Governor signed the Cannabis Regulation Act, making New Mexico the 17th state to legalize the cannabis for recreational use. The Cannabis Regulation Act combined the regulation of both adult-use and medical cannabis into one commercial cannabis framework. Consumers are eligible to buy up to 2 ounces of cannabis, 16 g of concentrate, 800 mg of edibles, and 6 immature cannabis plants at one time. Cannabis purchases will include a 12% excise tax on top of the state’s regular 8% sales tax. Beginning in 2025, the excise rate would climb by 1% each year until it reaches 18% in 2030.

In 2021, New Mexico passed legislation that exempt businesses from Section 280E of the federal tax code that allows cannabis companies to deduct business expenses from their state income taxes.

The Cannabis Control Division began taking applications for all types of licenses in December 2021 and as of December 4, 2024, 3,071 (1,928 as of December 2022) business licenses have been approved, including 400 producers, 675 micro producers, 900 manufacturers, 1,006 retailers, 56 couriers, 28 consumption areas, 6 testing laboratories and 0 research laboratory. In the first quarter of 2025, New Mexico issued 644 new licenses which is the most of any market in the US.

How to Start a Cannabis Business in New Mexico?

Recreational cannabis sales started on April 1, 2022, and generated over $214 million in the first nine months, averaging about $24 million per month. For the same period, medical cannabis sales totaled about $144.2 million.

Total cannabis sales reached $557 million in 2023, including $394 million of recreational cannabis sales and $163 million of medical cannabis sales. In 2024, sales climbed further to $590 million, with adult-use sales accounting for 76% of all cannabis sold in New Mexico, according to the Cannabis Control Division data. In February 2024, New Mexico’s total cannabis sales since April 1, 2022, surpassed the $1 billion mark.

Based on New Mexico’s 2025 Supply & Demand Analysis Report – which analyzed 85 million retail transactions from April 2022 through February 2025 – the state’s cannabis market has demonstrated evolving consumer preferences and intense price competition. While flower and pre-rolls remain the dominant category at 58.36% of all-time sales, their share has declined from 63.92% at market launch to 52.81% by early 2025. Conversely, concentrates and vapes have grown from 25.19% to 29.66% of sales, and flower infused with concentrates has surged from 0.19% to 5.07%, signaling rising demand for higher-potency products. This shift coincides with dramatic price compression: concentrate prices fell 77% and flower prices declined approximately 62% over the same period. Despite pricing pressure, the legal market has achieved strong penetration, capturing 61% of adult-use consumer spending and 57% of medical patient expenditures, with medical patients averaging $310 in monthly spend versus $206 for adult-use consumers.

Although total sales moderated slightly to $567 million in 2025, the adult-use segment continued to strengthen, accounting for 77% of total sales. Since April 2022, New Mexico cannabis market has exceeded $2 billion in total sales, of which $583 million came from medical cannabis sales and $1,489 million from adult-use cannabis sales.

New Mexico Cannabis Market Infographics

How Can Cannabusinessplans Templates Help Start or Grow Your Cannabis Business?

The majority of cannabis licensing programs require the submission of a business plan as part of the application for a cannabis license. Even if it is not mandated by law, a business plan is essential for securing funding and assisting an applicant in understanding how much money it will take to start a cannabis business and how much profit it could make.

A well-structured business plan can make all the difference in helping you demonstrate your proposed cannabis business’ compliance with regulations and its operational viability.

Our complete 70% ‘ready-to-go’ cannabis business plan template package is everything you need to create a professional business plan for a cannabis business with expert financials and projections. A complete cannabis business plan template package includes:

  • Excel Financial Model: change variables and immediately see the impact, break down operational and capital costs, know how much it will take to get into the business and the potential profits.
  • Word Business Plan: value proposition, market analysis, marketing strategy, operating plan, organizational structure, financial plan and more.
  • PowerPoint Pitch Deck: provide a quick overview of your cannabis business plan.
  • Unlimited support!

Cannabis Micro Producer Business Plan Sample, New Mexico

New Mexico Cannabis Market

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New Mexico Hemp Industry