Many producers were ringing alarm bells over an expected cannabis shortage following the opening of the state’s adult-use market. But high production rates have reportedly led to abundant supplies and lower wholesale prices.
Executive Director of the New Mexico Cannabis Chamber of Commerce Ben Lewinger told MJBizDaily that wholesale prices for cannabis flower have dropped from $4,000 per pound to around $2,500 per pound over the last two months. “I think that’s only going to get better,” Lewinger said.
Supplies are expected to improve with the next harvest in October and that should mean cheaper prices at the register for consumers. This potentially could improve the state’s cannabis profits since many New Mexicans are reportedly still driving to Colorado, where cannabis flower only costs around $700 a pound—nearly 75 percent less than in New Mexico.
Biden Worse Than Trump on Pot Arrests
Despite President Joe Biden’s campaign promises to decriminalize cannabis and expunge the records of marijuana prisoners, federal cannabis arrests have jumped 25 percent under the current administration.
According to LA Weekly, federal cannabis arrests spiked in 2021, the first year of Biden’s presidency. Agents reportedly arrested 6,606 people for violating cannabis laws. While those post-pandemic numbers were expected to increase compared to 2020, cannabis advocates NORML point out that it is the highest number of cannabis arrests in a year since 2011, when 8,500 people were placed into custody.
“At a time when the overwhelming majority of voters support legalization, and when more and more states—and even members of Congress—are moving toward this direction, it is troubling to see federal agents and their local partners reversing course and reinvigorating their marijuana-related enforcement activities,” said NORML’s Deputy Director Paul Armentano.
Federal agents also destroyed 5.53 million cannabis plants in 2021, representing a 20 percent bump compared to the precious year.
N.M. to Make $22 Million in Pot Taxes
The New Mexico Legislative Finance Committee projects that cannabis sales will bring in around $22.7 million in taxes for the state. The projection is lower than a previous prediction that the market would bring in around $27 million.
President and CEO of the state’s largest cannabis company Ultra Health Duke Rodriguez said the lower-than-expected revenue is due to production limitations imposed on producers. “Everyone is wondering why can’t we reach $50 or $60 million as previously predicted; it’s because we don’t have enough product for consumers to make that choice,” Rodriguez told KOB.
Rodriguez said retail cannabis prices are too high and that the state is losing consumers to the black market, where prices are significantly lower.
The state’s cannabis excise tax is scheduled to increase 10.6 percent next year.