New Mexico’s adult-use marijuana sales bolstered by tourism, Texas residents

It’s been a little more than a year since New Mexico launched adult-use marijuana, with sales topping $300 million during the initial 12 months.

The state brought in a record $32 million in recreational sales during March alone and is well on its way to reaching $400 million for 2023, as projected by the 2023 MJBiz Factbook.

Large population centers – including Albuquerque, Las Cruces and Santa Fe – are driving much of those sales, according to data from the New Mexico Regulation & Licensing Department.

Stores located in Albuquerque accounted for nearly 31% of total adult-use sales between August 2022 and February 2023.

That number increases to more than 36% if sales from nearby metro communities – such as Bernalillo and Rio Rancho – are included.

Either way you slice it, the Albuquerque market is dominating marijuana sales in New Mexico.

For example, Sante Fe, which was second in sales between August 2022 and February 2023, accounted for only 7% of the total recreational marijuana sold in the state.

And while total sales might be lower in smaller municipalities, retailers in border and tourist areas are bolstering the emerging market – with some stores actually performing better when taking population into account.

MJBizDaily took a visual dive into New Mexico marijuana sales data by city, ZIP code and store location. Here is what we found:

The changing medical market

Medical marijuana sales declined with the launch and growth of New Mexico’s recreational market – as is typically the case after the launch of adult use.

For example, the same pattern emerged in neighboring Arizona in 2020.

MMJ sales in New Mexico declined 25% from April 2022 to January 2023, with dispensaries recording $13.8 million in January.

Sales did recover in March, to $15.4 million, but are still down $2 million from last April.

Overall medical marijuana sales might be declining, but the average sales per transaction from patients outpaced the average for recreational shoppers.

The amount spent on MMJ per transaction in March was $53.50 versus $44.60 for adult-use products.

The per-transaction gap has stabilized since the launch of recreational sales, but it will be an interesting statistic to follow as the adult-use market expands in the coming years.

Where recreational sales are happening

If you remove Albuquerque and other population centers from the equation, the story of recreational sales in New Mexico has been tourism and Texas.

Sales in border communities such as Clovis, Hobbs and Sunland Park are outpacing what would be expected given their smaller populations – a clear indication that Texans are crossing the border to purchase marijuana from New Mexico.

The same pattern can be seen with tourist destinations such as Carlsbad, Ruidoso and Taos.

The impact can be seen more clearly when looking at ZIP code data.

Sparsely populated Sunland Park, situated on the border across from El Paso, is home to two of New Mexico’s leading store locations based on total recreational sales.

Ultra Health and Everest Cannabis Co. brought in almost $6.1 million in combined sales from August 2022 to February 2023.

While impressive, the figures are even more meaningful when factoring in the number of residents in the area.

The per-person recreational marijuana spend (sales divided by population) for Sunland Park’s 88063 ZIP code was $1,044, topping any other New Mexico ZIP code.

Other border towns also performed well.

The per-person spending for ZIP codes in Clovis (88135) and Hobbs (88240) were $499 and $258, respectively, much higher than those in Albuquerque and Santa Fe.

Tourism also buoyed per-capita spending in less densely populated areas of the state.

Ruidoso ($546), known for its skiing, and Taos ($598), a popular art and history destination, both outperformed for the number of people living in their respective ZIP codes.

Leading locations

While recreational marijuana remains illegal in Texas, it pays to have a store on the border.

Recreational marijuana sales in individual border stores outpaced their cohorts in New Mexico’s more populous cities such as Albuquerque.

Ultra Health’s Sunland Park location sold almost $3.6 million recreational marijuana between August 2022 and February 2023.

Urban Wellness, the top-selling Albuquerque store, brought in $1.95 million for the same time period.

In fact, almost half the top 20 revenue-generating stores in New Mexico are located in cities bordering Texas, such as Anthony, Hobbs and Sunland Park and Hobbs.

The remaining stores on the list are located in tourist destinations or in populations centers.

If previous adult-use launches are any indication, New Mexico’s recreational market should experience consistent growth for the foreseeable future.

The likelihood of Texas legalization remains slim, so don’t expect any shifts from current sales trends given that out-of-state customers help drive New Mexico marijuana sales.

Source: https://mjbizdaily.com/new-mexico-adult-use-cannabis-sales-bolstered-by-tourism-texas/