To many, the “green” in “green rush” stood for money as much as weed. But now that times are getting tough, and the rush isn’t quite as lucrative as believed, many have lost sight of the true meaning of legalization.
The dreams of bright-eyed weed entrepreneurs haven’t exactly lived up to expectations. New Mexico’s cannabis industry is starting to feel the Big Pinch that many warned would be coming. Rumors are swirling of layoffs and downsizing. In more mature markets, like Colorado and Oregon, and more robust markets, like Canada, cannabis companies are slashing their workforce and looking for ways to cut spending.
Last year, in every mature market, including New Mexico, producers multiplied like mad, filling all the nooks and crannies of the country with as much product as they could grow. It was too much of a good thing. Wholesale weed prices crashed as favorable growing conditions brought increased stocks to outdoor growers and production facilities proliferated. This year isn’t looking much better.
The state’s Cannabis Control Division (CCD) has repeatedly said that it will continue handing out cannabis business licenses as long as anyone wants one. As far as it’s concerned, the law says the industry is open to everyone, and the agency plans to follow the law.
In June, Colorado-based company Schwazze—which owns R. Greenleaf and Everest—sent a letter to Governor Michelle Lujan Grisham calling for a pause on new licenses. It was signed by nearly 100 of the state’s cannabis industry leaders.
“It’s easy to suggest this is an opportunity for natural economic drivers to create equilibrium through supply and demand,” wrote the authors. “However, New Mexico companies and entrepreneurs are already failing due to unsustainable market conditions combined with a lack of resources to hold both the legal and the illegal market accountable.”
In an email to The Paper., R. Greenleaf and Everest spokesperson Jessie Hunt writes: “Unfortunately, the illicit market maintains a stranglehold on the New Mexico cannabis market because the state issued too many licenses without first standing up a proper compliance and enforcement regime.”
As a result, she says New Mexico has become a place where scofflaws can continue to operate to the detriment of people who have poured their life savings into a small business.
“Until New Mexico gets a handle of regulating the market so everyone has to play by the same rules,” she writes, “industry layoffs and the low profits will continue to be the norm.”
These concerns aren’t without merit. Applying laissez-faire capitalism to a highly-regulated industry may not be the right path forward. Weed businesses face quite a few more hurdles and hoops than those in other industries. They have to compete with no standard business loan access, no method of deducting business expenses, higher taxes and a few other industry-specific challenges—and that’s before they start competing with other businesses.
Meanwhile, illicit market players are getting a leg up over the regulated industry. Not only is it easier for bad actors to produce in a legal market without getting noticed, they can also sidestep all the overhead and charge less for products.
As is always the case, full-throttle utopianism always slams into reality at some point.
Unfortunately, cannabis companies aren’t the only ones feeling The Pinch these days. Americans from all walks of life are facing inflation, increased gas and food prices and fears about the encroaching AI apocalypse. The Consumer Price Index is at 3.7 percent—down from 9.1 percent in June, but trending upward again. Everyone’s tightening their belts a little bit.
It’s going to be a tight holiday season for everyone—whether they’ve been naughty or nice. But it’s times like these that we need to stop and remember what this was all for. The fantasy of an endless supply of money may not have lived up to the reality, but the state has ultimately gained a net positive from legalization.
Most important of all: It is no longer legal to lock people in cages for voluntarily smoking an innocuous plant. Anyone who has had an unfortunate brush with law enforcement over marijuana will tell you that it should never have been outlawed in the first place. The legalization bill was restorative in that it righted a previous wrong. Business profits, tax collection and any other positive repercussions are just icing on the cake.
“Legalizing and regulating cannabis, if done right, should be a tool for achieving health equity, social equity and justice,” says Emily Kaltenbach, senior director of criminal legal and policing reform at the Drug Policy Alliance. “We advocate for legalization because of social equity and the importance of acknowledging that the history of prohibition has caused harms, and we have to take responsibility for those harms.”
Kaltenbach says this includes automatically expunging past cannabis arrests and convictions, making sure that barriers to participating in the industry or in other industries are eliminated for past drug offenders and ensuring cannabis profits are redirected back into the communities that have been most harmed by the Drug War.
“New Mexico has done many of those things,” she says. “We still need to ensure that revenues are redirected back into communities that have been most harmed, but New Mexico’s law is outstanding when it comes to expungement and limiting barriers for people with past convictions.”
The law has also made it so that upstanding citizens who contribute to society and enrich our local culture while also enjoying the pleasures of marijuana no longer have to live with the specter of imprisonment haunting their every waking moment. It made it so that people who were thrown in cages for smoking a plant can now get a job—a simple right that everyone else takes for granted.
“And that should be our measuring stick,” says Kaltenbach. “That we’re no longer criminalizing people for the use and possession of cannabis.”