How to Open a Dispensary in New Mexico 2024

The cannabis industry in New Mexico is thriving, with recent legislation creating a lucrative market for prospective business owners. Since the passage of the Cannabis Regulation Act in 2021, New Mexico has become a prime location for cannabis entrepreneurs, with the state’s cannabis market seeing significant growth since the legalization of adult-use cannabis. In 2022 alone, cannabis sales surpassed $300 million, driven by both recreational and medical consumers. With this momentum carrying into 2024, the state presents a promising opportunity for dispensary owners.

New Mexico’s cannabis industry is governed by the New Mexico Regulation and Licensing Department (RLD), which ensures compliance and oversees licensing for all cannabis businesses. The state’s cannabis regulations focus on safe sales, responsible consumption, and industry transparency. Whether you’re opening a medical or adult-use cannabis dispensary, you must ensure compliance with state laws at every step. Opening a cannabis dispensary in New Mexico involves navigating a series of legal and financial stages, and this guide provides a detailed breakdown to help you get started.

Understanding Cannabis Dispensary Licenses in New Mexico

In New Mexico, individuals or entities interested in opening a cannabis dispensary must apply for a Cannabis Retailer License, which allows for the sale of cannabis products to consumers aged 21 or older. Each dispensary must hold its own license, which is subject to annual renewal. 

There are several types of cannabis business licenses available in New Mexico, including:

• Cannabis Producer License: Allows the cultivation of cannabis plants for an annual fee of $2,500. Each licensed premises is subject to an additional charge of $1,000.The annual fee for growing up to 16,000 plants is an additional $5 per plant.

• Cannabis Producer Microbusiness License: For small-scale operations, this allows a business to produce cannabis at a single premises—with a maximum of 200 plants—for an annual charge of $1,000.
• Cannabis Retailer License: Permits the sale of cannabis products to adult consumers, with an annual fee of $2,500 and an additional $1,000 for each individual premises.
• Integrated Cannabis Microbusiness License: Allows for participation in multiple cannabis-related activities, such as production, manufacturing, and retail, but on a smaller scale. The annual fee is $2,500, with an additional $1,000 for each licensed premises.
• Vertically Integrated Cannabis Establishment License: Allows businesses to perform multiple cannabis-related activities such as production, manufacturing, and retail under a single license. The fee structure includes a $7,500 annual license fee, with an additional $1,000 each licensed premises.
• Cannabis Manufacturer License: For businesses that manufacture cannabis products, including edibles, concentrates, and other derivatives. The annual fee is $2,500, plus $1,000 for each licensed premises.
• Cannabis Testing Laboratory License: Permits the testing of cannabis products to ensure safety and compliance with regulations. The fee is $2,500 annually, plus $1,000 for each licensed premises.
• Cannabis Research Laboratory License: For facilities dedicated to researching cannabis cultivation, characteristics, or uses. The annual fee is $2,500, with a $1,000 fee for each premises.
• Cannabis Courier License: Allows the transportation of cannabis products to consumers or between businesses, with an annual fee of $250 and an additional $100 per licensed premises.

The Application Process for Opening a Dispensary

The New Mexico Cannabis Control Division (CCD) has introduced an automated licensing system known as NM-PLUS. This method is designed to make the application process more efficient by allowing applicants and licensees to apply for, modify, and renew licenses entirely online. The shift to NM-PLUS eliminates the need for paper forms, reducing the time and resources required for processing and reviewing applications.

To apply, amend, or renew a license, all submissions must now be made online through the NM-PLUS system. Paper applications are no longer accepted for any licensing steps, including new applications, amendments, and renewals. The New Mexico Regulation and Licensing Department currently places no restrictions on the number of cannabis licenses of any type that can be held. This policy is consistent with the provisions of the Cannabis Regulation Act.

Instructions for New Applicants

Follow these steps to register and submit your application:

• Visit NM-PLUS and select the “Self Register” option.
• Complete the registration form and click “Register.”

After submitting your registration, you will receive an email from cannabiscontrol@rld.nm.gov with a link to set your password. Be sure to check your inbox, and don’t forget to keep an eye on your spam/junk folders if the email doesn’t appear.

• Once your password is set, you can log in to the NM-PLUS portal.

Business Registration and Right Dispensary Location

Before submitting a license application, you must first register your business. You’ll be required to provide detailed information about your operations and any controlling persons involved. If you plan to use an agent to complete the application on your behalf, the agent will also need to create an account. You can then log in to your account to designate and authorize the agent to manage the application process. State laws in New Mexico allow municipalities to establish their own zoning and location rules for cannabis dispensaries.

• A cannabis dispensary in New Mexico must be located at least 300 feet away from any school or child daycare facility.
• Additionally, dispensaries must maintain a minimum distance of 600 feet from another cannabis retail establishment.

One of the critical factors in the success of a dispensary is its location. Real estate considerations go beyond just finding a compliant building; the setting must also cater to your target market. Urban areas with high foot traffic tend to be more profitable for cannabis dispensaries, while rural areas might offer less competition but also fewer customers.

Essential Components of a Cannabis Business Plan

When applying for a cannabis dispensary license in New Mexico, a well-prepared business plan is essential to support your application. This should not only outline your enterprise’s strategy but also demonstrate your understanding of the legal and operational requirements set by the state.

Key components of your business plan should include:

• Executive Summary: An overview of your business, including its mission and objectives.
• Company Description: Detailed information about your business structure, ownership, and services.
• Market and Competitive Analysis: Insights into the cannabis market in New Mexico and how your business will compete in the local landscape.
• Operations Plan: A detailed description of how you will run the dispensary, including compliance with state laws regarding security, product handling, and record-keeping.
• Management and Staffing: Outline your leadership team and their qualifications, along with staffing requirements.
• Financial Projections: A breakdown of your projected revenues, costs, and cash flow. This should also cover licensing fees, taxes, and other regulatory costs.

The CCD requires applicants to submit plans for security, zoning approval, and compliance with product tracking systems. Additionally, your business must meet all regulatory standards, including packaging, labeling, and testing requirements, and be prepared for inspections by state authorities.

Required Documents 

To open a cannabis dispensary in New Mexico, you are required to submit a Certificate of Good Standing from the New Mexico Secretary of State and a Certificate of Registration from the New Mexico Taxation and Revenue Department as part of the licensing application.

• Certificate of Good Standing: This document verifies your business complies with state regulations, including the filing of necessary reports and the payment of state fees and taxes. Issued by the New Mexico Secretary of State, you can request it through their Business Services portal. This certificate ensures your business is recognized as being in good standing with the state.
• Certificate of Registration: Issued by the New Mexico Taxation and Revenue Department, this certificate confirms your business is properly registered for tax purposes and compliant with New Mexico’s tax regulations. You can request it through the New Mexico Taxation and Revenue Department. It is important to have this document as part of the tax compliance verification during the application process.

Both of these certificates are essential to demonstrate your business is legally compliant—both in terms of incorporation and tax obligations—when applying for a cannabis dispensary license. For more details on how to obtain these documents, visit the respective state department websites.

Ensuring Compliance with New Mexico Laws

Running a cannabis dispensary in New Mexico requires strict adherence to state regulations. Dispensary owners must comply with laws regarding product labeling, advertising, and sales restrictions. For instance, all cannabis products sold must display accurate THC content labeling, and advertisements must avoid targeting minors.

To maintain transparency and prevent illegal sales, dispensaries are also required to utilize the seed-to-sale tracking system, which monitors products from cultivation to final sale. Regular inspections are conducted by the CCD to ensure compliance with these regulations.

To streamline compliance management and improve operational efficiency, dispensary owners can benefit from using IndicaOnline’s point of sale (POS) system. This advanced POS software integrates seamlessly with monitoring tools like the Marijuana Enforcement Tracking Reporting Compliance (Metrc) system, ensuring every transaction is properly recorded and reported, which is crucial for meeting regulatory requirements.

Taxation and Excise Taxes

In New Mexico, dispensaries are responsible for collecting taxes on marijuana sales and remitting them to the New Mexico Taxation and Revenue Department. Cannabis retailers must pay both the Cannabis Excise Tax and the Gross Receipts Tax (GRT) for adult-use sales. However, medical marijuana dispensaries are only required to pay the GRT. The Cannabis Excise Tax is currently set at 12% of the sales price, which will remain in effect until July 1, 2025. After that date, it will gradually increase to 18% by July 1, 2030. Additionally, consumers purchasing cannabis for personal use must pay a 5.13% sales tax on each transaction. These tax obligations are critical for dispensaries to manage in order to remain compliant with state regulations.

When securing funding for your recreational cannabis dispensary, it’s essential to account for several key categories of expenses to build a comprehensive budget. Here’s a breakdown of what to expect:

• Licensing and Legal Compliance: Licensing fees will be one of the first major costs. Depending on the type of license and your location, expect significant outlays for applications, legal consultations, and ensuring regulatory compliance. Legal and professional fees could start at around $50,000 to cover services like legal advice, insurance, and financial consultations​.
• Real Estate and Build-Out: Real estate expenses include rent, purchasing property, and renovation or build-out costs to make your dispensary compliant with regulations. Depending on the location, you should budget anywhere from $150,000 to $200,000 or more.
• Inventory and Products: To stock your dispensary, you’ll need an initial inventory of cannabis products, which can cost around $1,500 per pound. The total cost will vary based on your product mix, supplier rates, and expected demand.
• Security and Technology: Advanced security systems are mandatory for dispensaries. Expect to invest about $50,000 for hardware, cameras, software, and network systems to meet compliance standards​.
• Marketing and Branding: Marketing expenses could reach $100,000 or more, especially if you plan to hire a marketing team or agency. This includes website creation, advertisements, and promotional materials to attract customers.

Ensuring a Successful Opening Process

Opening a cannabis dispensary in New Mexico in 2024 demands thorough preparation, including a solid understanding of the application process and strict adherence to state regulations. The Cannabis Control Division (CCD) offers comprehensive resources to steer business owners through the necessary legal, operational, and compliance requirements. This includes guidance on licensing, security measures, product tracking, and regulatory updates.

Success in New Mexico’s competitive cannabis market requires careful planning in all areas, from choosing a compliant location to managing taxes and ensuring your business aligns with state cannabis laws. By meticulously following the outlined steps—from obtaining the correct licenses to ensuring compliance with all regulatory requirements—dispensary owners can set themselves up for success in the state’s rapidly expanding cannabis industry.

Note: Please note that this information is intended as a general guide and should not be considered expert legal or business advice. For specific legal and regulatory requirements related to opening a cannabis dispensary in New Mexico, consultation with legal professionals or direct referral to official state resources is recommended.