Conflicting views on when or if NM is headed for a medical cannabis shortage

Cannabis producers in New Mexico have their collective eyes on daily sales numbers to determine what sort of demand there will be moving forward a week after recreational-use sales started.  The New Mexico Cannabis Control Division reported more than $5.2 million in combined medical and recreational-use cannabis sales and more than 87,000 transactions in the […]

Conflicting views on when or if NM is headed for a medical cannabis shortage

Cannabis producers in New Mexico have their collective eyes on daily sales numbers to determine what sort of demand there will be moving forward a week after recreational-use sales started. 

The New Mexico Cannabis Control Division reported more than $5.2 million in combined medical and recreational-use cannabis sales and more than 87,000 transactions in the first three days. The division is expected to release more numbers Friday morning. 

In addition to the hype of first-time adult-use sales, the state’s cannabis industry will likely face a spike in sales on April 20, or 4/20, which is usually the biggest day of the year for cannabis sales.

While some producers told NM Political Report that they are set for the weeks and months to come, one of the state’s largest cannabis companies predicts the state is headed for a “severe shortage” of cannabis, and soon.  

“I say we’re 20 days out on the low end, about 25 on the high end,” Ultra Health President and CEO Duke Rodriguez said. 

State law defines a cannabis shortage as a situation when supply is “substantially” less than the three month period leading up to the effective date of the Cannabis Control Act. 

But Rodriguez, who has long warned about an impending shortage and has advocated for an unlimited cannabis production limit, said the cannabis shortage he is warning about is different than the statutory definition. Rodriguez said the shortage will likely emerge as limited supplies of certain products or cannabis cultivars. He also said that those types of shortages will impact large businesses like his and trickle down to smaller businesses, who likely can’t weather reduced sales, which will ultimately impact those who rely on cannabis as medicine.

“We are ¼ of the market. When Ultra Health’s ability is severely hampered to meet 1/4 of the market, those patients, those consumers will have to migrate to smaller operators, and in those smaller operators, they’re going to eat through their inventory even faster,” Rodriguez said. “Like a glacier moving through, it’s just going  to eat up the smaller operators. Where it takes 25 days to eat up Ultra Health, it’ll take three days to eat up a small operator.”

Rodriguez predicts that the metropolitan areas of the state will be “sheltered” for some time because there are more dispensaries in those areas. But, he warned, those metropolitan dispensaries will feel the predicted shortages eventually. 

Likely unsurprising to anyone who is familiar with Rodriguez, he said state regulators can “shorten the amount of prolonged and protracted pain that’s about ready to be imposed upon first patients, and then second, non-patients,” by allowing producers to grow more cannabis.

“You cannot make it go away overnight,” Rodriguez said. “But every single day that you withhold the opportunity for actual plants to be put in production, will just be longer suffering, longer pain, and an unstable market.”

It’s unlikely the state’s Cannabis Control Division will increase cannabis production limits anytime soon, though. Regulators recently told the Santa Fe New Mexican that there were more than 1 million plants in production, although Rodriguez and others have severe doubts about that number

Robert Jackson, the director of cannabis producer Seven Point Farms, seems to have a similar view about the role of production limits.

“The supply issue is kind of real,” Jackson told NM Political Report. “But I really, really feel that it was too little too late from the state when they increased the plant limits. But the only people who could take advantage of that, possibly, were established companies. And even then, scaling up that fast was basically impossible unless you already had the production space available.”

Jackson said his company has an advantage in that it only has three retail stores to stock and began as a wholesale-only cannabis producer. 

“I know that some of these guys have some very big operations, but they also have many stores,” Jackson said. 

Jackson said Seven Point Farms is sitting on a fair amount of reserves that will likely not be released for wholesale until the market demand is more clear. He said his phone “hasn’t stopped ringing” with calls from licensed retail-only operators, who are not licensed to grow cannabis.

“I think that there’s going to be a bit of carnage, is what I think is going to happen,” Jackson said. “I think that there’s a lot of folks that have dispensary-only licenses and it’s going to get a little bit intense for those folks for a while.”

But overall, Jackson thinks that any high demands for cannabis will eventually taper off and the market will even out. 

Matt Muñoz is the chief innovation and finance officer for cannabis producer Carver Family Farm, which is a cannabis microbusiness that is limited to 200 plants. Larger businesses—or those that are not microbusinesses—can grow up to 20,000 cannabis plants, depending on the license. Muñoz said he is not too worried about widespread shortages trickling down to Carver Family Farm, because the company has a relatively quick turnaround time for getting cannabis to patients and customers. 

“Our perpetual harvest cycle kind of gives us that flexibility that we’re always going to have product,” Muñoz said. “If we run out, we’ll have some shortly afterwards.” 

Carver Family Farm also sells plant cuttings or clones as a way to help patients grow their own medicine and supplement sales. 

But, Muñoz said, he still thinks there’s a cannabis shortage coming and that it will likely impact medical cannabis patients the worst. 

“I’m sincerely worried for patients,” Muñoz said. “Because that’s, I think, where  the pain is going to be felt the most. I think some of the products that patients need, there might be a shortage of and we don’t have our manufacturing license, so we can’t provide the edibles that patients need right now. I think there is going to be a crisis, but I think it’s going to be on the patient level, and that’s really sad.

Ellie Besançon, the executive director of cannabis production company Red Barn Growers, said the company is selling “at a faster pace” than originally forecasted, but that thanks to early preparation for adult-use sales, Red Barn seems to be “looking good on supply.”

“At this point, I’m still feeling comfortable about what we have in reserves,” Besançon said. 

Besançon said her guess is that the demand for recreational-use cannabis will slightly decline in the next several weeks or months before it levels out. But, she said, it’s still too early to say for sure. 

“At the end of April, I think will be a good telling point for us, as we sort of collect ourselves from the craziness of this month, opening for rec[reational-use sales], 4/20. We’ll have a better sense of where we are, supply-wise, I think, after this month,” Besançon said. 

Dominic Garcia, the vice president of marketing and retail for Schwazze, a national company that recently acquired New Mexico cannabis producer R. Greenleaf, said he’s not worried about any imminent shortages. Garcia said R. Greenleaf has been ramping up production and bolstering supply in anticipation of the new adult-use cannabis market. 

“We’re building a whole new facility that’s going to be able to crank out a boatload of flower,” Garcia said. “We were kind of concerned about that late-May to June window of having supply. But what we’ve noticed right now is that this first week hasn’t taken off like we thought it would. So we’re actually feeling pretty good about supply.”

Chad Lozano, a cannabis patient advocate and co-host of NMCannaCast, said he personally hasn’t seen shortages yet, but said things could get bad if there are shortages, particularly of cannabis flower. 

“For some people, it’s going to be detrimental if they can’t get the medicine they need, especially flower, because most of the users use flower,” Lozano said. 

Lozano said the reason most medical cannabis patients prefer flower is because smoking it provides “immediate relief.” He said he encourages other medical cannabis patients to grow their own cannabis, especially now that anyone 21 years of age or older can grow up to six plants per person or 12 plants per household without a special permit or license. 

“You don’t have to worry about going anywhere if you grow for yourself and your self-sustaining,” Lozano said. 

Rodriguez said any cannabis producer comparable to Ultra Health in size, that says they’re not worried about a shortage is “being disingenuous” in order to not dissuade potential customers and patients. He said the next “stress test” for how soon his predicticted shortage will happen is Friday, one week from the first day of adult-use sales.

“We’ve got to know if the next seven-day period brings a new trend,” Rodriguez said. “If it brings the average down, then 22 turns into 25 possible days. If it brings it even lower, 25 days may extend up to 28 days. But either way, the shortage is imminent and inevitable.”

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Effort to challenge six laws enacted last year comes to an end

Effort to challenge six laws enacted last year comes to an end

Earlier this month, the New Mexico Supreme Court denied and dismissed the effort to challenge six laws enacted in 2023. The New Mexico Supreme…
Governor to call special session for public safety legislation this summer

Governor to call special session for public safety legislation this summer

Gov. Michelle Lujan Grisham announced that she will call the Legislature into a special session this summer to address public safety legislation that did…
Emily’s List endorses seven candidates for Legislature

Emily’s List endorses seven candidates for Legislature

Emily’s List, a nonprofit that supports women candidates and reproductive rights, endorsed seven incumbents facing general election opponents in New Mexico legislative elections. All…
Two PFAS chemicals designated hazardous substances under Superfund law

Two PFAS chemicals designated hazardous substances under Superfund law

The U.S. Environmental Protection Agency released a final rule Friday to designate two types of PFAS chemicals as hazardous substances. Those two chemicals are perfluorooctanoic…
BLM finalizes controversial public lands rule

BLM finalizes controversial public lands rule

The U.S. Bureau of Land Management finalized its controversial public lands rule on Thursday. This rule is controversial because it allows for conservation leasing…
Haaland signs order protecting sacred lands near Placitas

Haaland signs order protecting sacred lands near Placitas

Interior Secretary Deb Haaland signed an order on Thursday to withdraw more than 4,200 acres of land in Sandoval County near Placitas from mineral…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Lawmakers must find consensus on competing education spending plans

Lawmakers must find consensus on competing education spending plans

By Margaret O’Hara, The Santa Fe New Mexican A challenging task awaits New Mexico lawmakers in the next 30 days: Reconciling three very different…
Health workers fear it’s profits before protection as CDC revisits airborne transmission

Health workers fear it’s profits before protection as CDC revisits airborne transmission

Amy Maxmen, KFF Health News Four years after hospitals in New York City overflowed with covid-19 patients, emergency physician Sonya Stokes remains shaken by…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Proposal to curb executive powers moves to House Judiciary

Proposal to curb executive powers moves to House Judiciary

The House Government, Elections and Indian Affairs Committee discussed a potential constitutional amendment that seeks to limit the governor’s executive powers. The committee approved…
Abortion fund provider rebrands and holds open house

Abortion fund provider rebrands and holds open house

An abortion fund provider unveiled a rebrand and offered an open house in Las Cruces to celebrate the organization’s new name, mission and values. …
Stansbury introduces judicial ethics bill on U.S. Supreme Court steps

Stansbury introduces judicial ethics bill on U.S. Supreme Court steps

U.S. Rep. Melanie Stansbury announced a bill on Thursday that would, if enacted, establish judicial ethics to the U.S. Supreme Court. The Judicial Ethics…
Politics and abortion, how much will it matter?

Politics and abortion, how much will it matter?

At the national level, abortion is still a high-stakes issue with both major presidential candidates talking about it in their campaigns, but it may…
Abortion fund provider rebrands and holds open house

Abortion fund provider rebrands and holds open house

An abortion fund provider unveiled a rebrand and offered an open house in Las Cruces to celebrate the organization’s new name, mission and values. …
Politics and abortion, how much will it matter?

Politics and abortion, how much will it matter?

At the national level, abortion is still a high-stakes issue with both major presidential candidates talking about it in their campaigns, but it may…
How the AZ Supreme Court decision on abortion impacts New Mexico

How the AZ Supreme Court decision on abortion impacts New Mexico

The Arizona Supreme Court ruled on Tuesday that an 1864 abortion ban is enforceable, throwing another state bordering New Mexico into the situation of…
Effort to challenge six laws enacted last year comes to an end

Effort to challenge six laws enacted last year comes to an end

Earlier this month, the New Mexico Supreme Court denied and dismissed the effort to challenge six laws enacted in 2023. The New Mexico Supreme…
Vasquez calls out Republicans for ‘inaction’ on border policy

Vasquez calls out Republicans for ‘inaction’ on border policy

U.S. Rep. Gabriel “Gabe” Vasquez, a Democrat who represents the state’s 2nd Congressional District along the U.S.-Mexico border, cosponsored a resolution on Monday calling…
Politics and abortion, how much will it matter?

Politics and abortion, how much will it matter?

At the national level, abortion is still a high-stakes issue with both major presidential candidates talking about it in their campaigns, but it may…
Two PFAS chemicals designated hazardous substances under Superfund law

Two PFAS chemicals designated hazardous substances under Superfund law

The U.S. Environmental Protection Agency released a final rule Friday to designate two types of PFAS chemicals as hazardous substances. Those two chemicals are perfluorooctanoic…
New Mexico Voices for Children has new leadership

New Mexico Voices for Children has new leadership

New Mexico Voices for Children, an organization that focuses on tax policy and how it impacts children in poverty, has new leadership. Gabrielle Uballez…
Abortion fund provider rebrands and holds open house

Abortion fund provider rebrands and holds open house

An abortion fund provider unveiled a rebrand and offered an open house in Las Cruces to celebrate the organization’s new name, mission and values. …

GET INVOLVED

© 2023 New Mexico Political Report