New Mexico Medical Cannabis

The Lynn and Erin Compassionate Use Act, 2 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 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 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.

New Mexico Recreational Cannabis

In April 2021, New Mexico Governor signed the cannabis bill, making New Mexico the 17th state to legalize the cannabis for recreational use. 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 reached 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 January 2024, 2,843 (1,928 as of December 2022) business licenses have been approved, including 402 producers, 460 micro producers, 850 manufacturers, 1,050 retailers, 51 couriers, 23 consumption areas, 6 testing laboratories and 1 research laboratory.

How to Start a Cannabis Business in New Mexico?

Recreational cannabis sales 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. 2023 brought in about $557 million in total sales, including $394 million of recreational cannabis sales and $163 million of medical cannabis sales. Adult-use sales accounted for 70% of all cannabis sold in New Mexico in 2023, according to the Cannabis Control Division data.

New Mexico Cannabis Market Infographics

New Mexico Hemp Industry