New Mexico marijuana prices have dropped since the state opened its recreational weed doors, but are still higher than those in more mature markets. With an overabundance of competition and product — both legal and illegal — and a high demand, retailers may be forced to drop those prices even lower in the coming year.
On a recent trip to Pueblo, Colorado, your plucky reporter bought an ounce of mid-shelf recreational-use marijuana for $49 (including taxes). It was an amazing deal, and the flower was covered with a dense layer of trichomes that did not disappoint — better than some top-shelf flower found in New Mexico.
The high quality and low price point of the Colorado weed raised some questions about the current cannabis market in New Mexico.
Oversaturation
Throughout 2023, New Mexico cannabis operators were ringing the alarm about oversaturation. In October, the Cannabis Control Division (CCD) confirmed that over 600 retail cannabis licenses were active. In comparison, there were 679 active retailer licenses in Colorado at the time. According to state data, the CCD has issued over 1,500 retail cannabis licenses since New Mexico started adult-use sales.
While the state’s recreational marijuana industry is still in diapers compared to the mature market found in Colorado, reports of oversaturation and oversupply should presumably have driven retail weed prices down.
Comparative Shopping
According to an April report from the Oxford Treatment Center in Mississippi, the average cost of an ounce of high-quality marijuana in New Mexico is $284, compared to $242 in Colorado. The average price of mid-range weed in New Mexico is $228 an ounce, compared to $200 in Colorado. The report was compiled using data submitted to the Price of Weed global marijuana index.
New Mexico prices appear to be steadily dropping as the market grows. According to a recent report from Cannabis Benchmarks, wholesale cannabis prices in New Mexico dropped by 30% between 2022 and 2023. So far in 2024, they’ve dropped by 13%. Other states are also following the trend, and weed is getting cheaper across the country. Between 2021 and 2024, the average retail market rate for a pound of bud in Colorado dropped by more than half — from around $1,700 to $750 — according to the Colorado Department of Revenue.
That could be good news for retailers and might lead to lower price points for consumers. The bad news for retailers is that not only are they competing with one another — they’re also competing against black market dealers who are selling lower-priced products without the additional burden of taxes.
In Albuquerque, illicit weed goes for $70 to $120 an ounce. In comparison, a good price for an ounce of state-approved mid-shelf weed can hover around $110. With the addition of taxes, the take-home price for the consumer would be around $130. That means illicit dealers already have a pricing edge over licensed outfits — and that’s before factoring in overhead costs that legal operators have to deal with like paying for licenses, renting retail space and dishing out payroll.
How Is Price Determined?
Back when weed was illegal, it was a simple matter for a dealer to settle on a price for their wares. The wholesale price was considered alongside the danger of operating an illegal business that could potentially land the dealer in prison. The prices that local competing dealers were charging were also factored in.
In this environment, buyers were left with limited knowledge about market prices and quality standards and were stuck paying whatever they could afford to get marijuana.
Retailers in state-approved markets have to consider their own list of complicating factors when setting weed prices. Costs associated with keeping the business running and training staff are passed down to the consumer along with production and manufacturing costs.
While the cost of business makes illicit weed cheaper compared to regulated weed — even in the age of legalization — the overall price of the drug from both sources has actually dropped since prohibition. That’s because it’s much easier for consumers to compare prices between a large number of competitors and dealers are no longer in dominant positions.
When setting prices, retailers have to consider production costs, quality of the product, the competitive landscape and the cost of retail operations.
Smart Shopping
There’s a real opportunity here for the resourceful shopper. The average price for an ounce of weed in New Mexico is higher, but comparable to the price in Colorado. But there are more dispensaries in New Mexico.
So while average weed prices in New Mexico are slightly more expensive than those in Colorado, with the abundance of competing dispensaries in larger towns like Albuquerque and Santa Fe, the determined shopper should be able to find flower at comparable prices (although they may not be of comparable quality).
The operator oversaturation that currently vexes the New Mexico marijuana industry is actually a boon for consumers. The overabundance of dispensaries in a smaller market is creating a tense environment that Colorado operators haven’t experienced. With all of those businesses in close quarters, competing for consumers’ dollars, there’s bound to be some hidden deals out there.
In a cursory shopping excursion in Albuquerque last week, your plucky reporter found mid-shelf ounces priced anywhere between $75 to $200 before taxes. The most expensive ounce was found in the North Valley at a whopping $600. It looked impressive, but some other poor soul will have to discover whether it’s actually worth it.