New Mexico’s cannabis industry has seen overall profits soar since adult-use sales launched in April 2022. But behind the scenes of growing state revenues and expanding mega-operators, approximately one-third of all the weed companies licensed by the state have closed up shop forever.
An analysis of cannabis sales data from April 2022 through May 2025 matched monthly sales reports with business registry data, tracking the activity of over 580 unique cannabis companies across the state. Of those, about 194 companies reported sales at least once since they received their licenses, but they ultimately disappeared from the data.
Based on the lack of sales data in recent months, these companies have likely shut their doors for good. A company with no sales data in a given month may have simply failed to file, but if its absence extends over multiple months, then it’s a strong indicator that the business may have closed, surrendered its license or fundamentally changed its legal structure. Cannabis businesses are required by law to submit monthly sales reports to the state.
While New Mexico’s Cannabis Control Division (CCD) doesn’t regularly publish closure data, nor does it require companies to formally surrender their licenses when they stop operating, sales records offer an indirect but revealing window into the industry’s inner workings. A business that reports sales in 2023 but none in 2024 or 2025 is, for all intents and purposes, out of the game.
The numbers suggest that the cannabis industry in New Mexico is still leveling out. When recreational sales began in April 2022, 78 licensed companies were reporting activity. By May 2025, that number had surged to nearly 380. The initial green rush following the launch of adult-use sales has led to state of high saturation and intense competition. In a market with fewer than 2.1 million residents, such saturation is difficult to sustain.
As the overall license count increased, so did the number of licenses that went dark. For some companies, the end may have come quickly. Others might have struggled for a year or more before quietly shutting down operations.
The sales data doesn’t provide reasons for these closures. But for industry stakeholders, the reason is obvious: Too many licenses led to declining wholesale prices and subsequently put a damper on profits. Small businesses, in particular, may have faced special challenges due to limited access to capital and competition from better-funded operators.
But the current situation was predicted by industry experts years ago, and state regulators have been well aware of the issue since legalization began. On a number of occasions, the CCD and state legislators have told The Paper. that New Mexico’s cannabis law purposefully left out licensing caps to allow everyone the opportunity to compete in the market.
When the law was passed, advocates touted this as a feature that represented equity in the state’s policies. But struggling businesses began calling for licensing caps and temporary pauses as dispensary after dispensary seemingly opened on every New Mexico street corner.
Back in 2023, for example, Executive Director of Seven Point Farms Robert Jackson said in an interview with The Paper.’s sister publication The Rolling Paper. that the number of dispensaries was getting out of hand. “It’s absolutely, fundamentally detrimental to the health and longevity of the industry,” he said. Unfortunately, Seven Point Farms is one of those dispensaries that is no longer in operation. According to state records, the owners transferred leases to their Albuquerque locations in February of 2024, and the company’s business license expired last September.
Experts say that the current instability of the industry is part of a natural process and this shakeout phase is typical of emerging markets. It often leads to consolidation and eventual stability as an industry matures. Though painful for those who aren’t around anymore, the process typically results in a healthier and more sustainable market.
The state of the New Mexico cannabis industry overall seems to support this idea. Despite the closures, statewide sales have reached totals between $33,000 and $39,000 every month since January. Compare that to $22,000 in April 2022. While many companies have shut down, there are more New Mexicans buying weed than ever.
Meanwhile, the number of active licenses has more than tripled since the launch of adult-use sales, and new operators continue to enter the market. If the experts are right, the remaining companies are likely those with more resilient business models, better funding or stronger operational strategies.
The data doesn’t capture informal exits—like companies that pivoted into wholesale, merged with others or rebranded under new license structures—but it does offer the clearest snapshot currently available of who’s in and who’s out.
Fewer companies may remain, but those that do are likely to be stronger, more experienced and better positioned for long-term success. For consumers, this may mean more consistency in products and pricing. For new entrepreneurs looking to jump into the game, the data provides a clear message: Profitability in the cannabis industry requires more than just a license and a love of weed.