adult-use cannabis

NM sees highest month in cannabis sales, collective $10 million in tax revenue

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New Mexico has collected, or is due to collect, nearly $10 million dollars from cannabis taxes, according to the state’s Regulation and Licensing and Taxation and Revenue departments. 

According to the latest announcement from the Regulation and Licensing Department, July marked the highest sales so far with more than $40 million in combined medical-use and adult-use sales. 

According to numbers provided by Regulation and Licensing, since recreational-use sales started in April, New Mexico has seen a total of about $196 million worth of cannabis sales. About $112 million was for adult-use sales which are taxed by both gross receipts and cannabis excise taxes. The total amount of sales since April, multiplied by the 12 percent cannabis excise tax signals more than $10.5 million in tax revenue, not counting gross receipts taxes on cannabis and related accessories retails might sell. But according to numbers reported by the Taxation and Revenue Department, the state is due about $9.9 million in cannabis excise tax revenue. 

Charlie Moore, a spokesperson for the tax department, told NM Political Report that the difference in numbers is likely due to not all businesses filing taxes on time. 

“The excise tax numbers we provide are a snapshot in time – it’s how much has been reported to us as of the date we run the query,” Moore said. “Though the deadline to report is the 25th of the month, some businesses may be reporting late.” 

The difference between what the tax department has reported and the calculation based on what the Regulation and Licensing has reported is nearly $700,000. Still, accounting for just the cannabis excise tax, the state is a little less than halfway to the $22 million Taxation and Revenue Secretary Stephanie Schardin Clarke projected the state will see by the end of the fiscal year.

cannabis excise tax

New projections estimate $22.7 million in cannabis tax revenue

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After almost five full months of recreational-use cannabis sales in New Mexico, experts say the initial revenue projections were slightly higher than what is now expected. 

During a Legislative Finance Committee meeting on Wednesday regarding revenue projections, New Mexico Taxation and Revenue Secretary Stephanie Schardin Clarke told lawmakers that the state’s general fund is expected to see about $22.7 million in revenue by the end of the current fiscal year from the state’s cannabis excise tax with an expected 10.6 percent increase each year after that. According to the committee’s chief economist though, the current projection for Fiscal Year 23 is about $5 million less than what was projected last December. The committee’s own analysis of cannabis tax revenue also projected that cannabis business licensing fees will generate about $5 million in FY 23, which began on July 1. 

There was almost no mention of cannabis revenue from committee members, but the head of one prominent cannabis producer said the new projections are a sign of overly limited cannabis production and a too-high cannabis excise tax rate. 

Duke Rodriguez, the president and CEO of the cannabis company Ultra Health, said the current limit of 20,000 plants per cannabis cultivator is still not enough to support the demand in the state, which he said contributes to higher cannabis prices that are not competitive with the illicit market. 

“Prices need to fall, quantity needs to increase and quality has to be maintained at the same time,” Rodriguez said. “But we need a per gram price of around five, pre-tax, and we’re already above 10. So, until we get a more competitive product in the marketplace, we’re not going to see that demand appear.