Since the publication of this article, we have reviewed new data from the New Mexico Cannabis Control Division’s 2024 Strategic Plan. While concerns about market saturation and dispensary challenges have been raised by industry figures, the Cannabis Control Division reports ongoing growth in the state’s cannabis market. Additionally, enforcement efforts continue, with inspections and licensing activity for dispensaries across the state. We remain committed to providing accurate and timely updates and will continue to monitor
New Mexico’s cannabis industry is drowning in a sea of its own success. What was once a green rush has quickly turned into a fight for survival as dispensaries struggle to keep their doors open in a market that’s more crowded than a Friday night at a dive bar.
Since recreational cannabis sales became legal in 2022, the state has issued over 3,000 cannabis licenses, packing the landscape with more than 1,000 retailers. It’s a staggering number for a state with just over 2 million people, and the result has been brutal. Small and legacy operators—those who were the foundation of New Mexico’s medical cannabis scene—are waving the white flag, unable to compete in a market that’s become flooded with new players.
“Nobody Is Doing Well”
Eric Briones, owner of Minerva Canna, one of the state’s longest-standing cannabis businesses, recently announced that all seven of his dispensaries will shut down. After 14 years in the business, he’s seen enough. “We’re in a situation where nobody, and I mean nobody, is doing well right now,” Briones said, pointing to oversaturation and a lack of enforcement against illegal sales as the primary reasons for closing his shops.
And he’s not the only one sounding the alarm. Across the state, retailers are struggling to survive. Duke Rodriguez, CEO of New Mexico’s largest cannabis company, Ultra Health, echoed Briones’ bleak assessment. “This industry is generally on life support at this point. Anyone who denies that is not being honest about the real situation.”
A Market Oversaturated to the Breaking Point
So how did we get here? Let’s break it down. New Mexico legalized medical cannabis in 2007 and, by 2021, had 34 licensed operators running around 120 dispensaries. But after the state opened the floodgates for recreational sales in 2022, everything changed. The number of cannabis licenses skyrocketed, and today, the state has issued over 3,000 cannabis licenses for a population of just over 2 million.
To put that in perspective, neighboring Colorado—a state with over double the population—has fewer than 1,000 retail licenses. Arizona, with nearly four times the population, has just 180 dispensaries. New Mexico’s cannabis market is now the most densely packed in the U.S.
This rush of licenses, combined with a booming illegal market, has left legal operators in a chokehold. Even established companies that helped build the industry are folding. The competition is fierce, and for many dispensaries, the math just doesn’t add up.
The Illicit Market Isn’t Going Anywhere
Beyond oversaturation, another massive problem is looming: the illegal market. Cannabis retailers across New Mexico are calling out the state’s failure to crack down on unlicensed operations. While legal dispensaries are paying taxes and jumping through regulatory hoops, illegal sellers are operating under the radar, undercutting prices and dodging regulations.
Despite the state’s Cannabis Control Division conducting a record number of inspections, the illegal market continues to thrive. Retailers are demanding stronger enforcement and more aggressive actions to shut down these bad actors, but so far, progress has been slow.
No Room for Error
For smaller retailers, this hyper-competitive market means there’s no room for mistakes. Dispensaries that hoped to carve out a niche are finding themselves squeezed from all sides—by the sheer number of licenses, by large corporations that can weather the storm, and by illegal sellers that operate without the same rules. For many, it’s a losing game.
As New Mexico’s cannabis industry faces this breaking point, the future remains uncertain. Without a halt on new licenses and stronger enforcement against illegal operators, the question isn’t if more dispensaries will close—it’s when.
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