Since the legalization of recreational cannabis in New Mexico, the number of businesses enquiring about cannabis retail licensing has increased. Profits are there to be made for progressive business owners looking to sell cannabis-based products.

Most business owners are desperate to do things the right way from the start. They know that the authorities will be watching like hawks, especially in the early days of this burgeoning industry.

Any mistakes could lead to serious legal trouble and considerable expense. Qualified and experienced legal counsel is necessary when entering a high-risk industry like cannabis retail.

We are fully up to date with the changing legal and regulatory requirements and our industry knowledge can help you obtain the cannabis retail license you need to start your business on the right footing.

Producer/dispensary licenses for cannabis businesses in New Mexico

In New Mexico, there are several types of cannabis business licenses awarded: producers/dispensaries, manufacturers, and testing labs.

Considerable work goes into the production of safe cannabis products like edibles, capsules, and oils before they reach the stores – hence the need for the testing lab and manufacturer licenses.

In New Mexico, it has been legal since 2007 for licensed producers to grow up to 450 cannabis plants and for dispensaries to sell it to patients at a retail storefront.

To be able to sell cannabis products, your business will need a producer/dispensary license. Dispensaries (retail operations) must follow strict protocols from the state for product tracking, security, record-keeping, and hiring.

Cannabis business formation application

To successfully form a cannabis business in New Mexico, the business must be licensed for every type of work you want to perform.

Even if all of the services you are looking to provide are interrelated, you need a license for each component of the business operation.

For instance, if you intend to sell and deliver cannabis, the business must have both a retail store license and a transportation license.

Readying your business entity to meet the requirements of the licensing process is no simple matter. You must execute corporate documents, leases, and real estate agreements.

Your corporate documents are a vital part of your application. You must gather documents such as:

• Articles of incorporation
• Corporate bylaws
• Partnership agreements
• Certificates of good standing

Then, obtaining the state license to operate is the most difficult step. You will be competing against many aspiring business owners looking to be granted one of the limited number of licenses available. The application process is complex and detailed.

Amongst other documentation, you will need to submit a business plan showing how you intend to fund your operations and become a successful retailer, including information on personnel, horticulture, and technology.

Our experienced cannabis business attorneys can assist you in navigating these steps.

What are the fees and background check requirements?

Some regulations vary from city to city and area to area in New Mexico. Some local governments may even forbid cannabis retail ventures to operate.

It’s best to check with your local jurisdiction but the following are the state laws pertaining to fees:

• Application fees: $10,000 to apply for a producer/dispensary license (manufacturer and testing lab licenses are less expensive).
• License fees: $30,000 for a producer/dispensary license if you’re growing 150 plants or fewer. For each 50 plants, an additional $10,000 is added (e.g., $50,000 if you’re growing 201-250 plants).

All aspiring cannabis retail business owners in New Mexico must consent to an annual criminal history background check to obtain (or renew) a cannabis business license.

Microbusinesses

Cannabis microbusinesses are those that want to combine the elements of cultivating, manufacturing, selling and transporting adult-use cannabis products on a small scale.

New Mexico now offers an integrated cannabis microbusiness license that allows the holders to control all facets of their cannabis businesses — from the field to the store — with the following limits placed on activities:

• You can produce cannabis at a single licensed premises, provided that no more than 200 total mature cannabis plants are possessed at any one time.
• You can manufacture cannabis products at a single licensed premises
• You can sell and transport cannabis products that you produce or manufacture
• You can operate out of only one retail establishment, and
• You can courier cannabis products to qualified patients, primary caregivers, reciprocal participants or directly to customers.

An integrated cannabis microbusiness license incurs a fee of up to $2,500 per year and an additional fee of $500 per year for each licensed location.

While a microbusiness license may be a great option for business owners looking to start up, it does require considerable expertise in multiple areas of cannabis growing, manufacturing, transporting and retailing.

This does not come without its pitfalls — practical and legal — so the advice of an experienced local cannabis business lawyer is priceless if you want to set your operation up the right way.

A cannabis lawyer from Legal Solutions of New Mexico may even be able to help you access funding from the New Mexico Finance Authority’s loan scheme that has been set up for cannabis microbusinesses in the state.

Zoning challenges

After license applicants have passed the criminal background check, are certified with the Cannabis Control Division (CCD), and have paid the license fee, they must adhere to local zoning ordinances and obtain a local business license before starting operations.

The local community has considerable influence on the requirements for business licensing for zoning, as it has the authority to make reasonable restrictions on time, place and manner of cannabis sales under the Cannabis Regulation Act.

As such, separate zoning ordinances apply in different towns and counties in New Mexico. Most will require some form of special use permit process before cannabis businesses can do any construction, for instance.

The county may require a lot of information about land use and business operations, and want to ensure that certain safeguards are in place before granting permission. Appearances before the county planning commission may be required.

This can be a major hurdle to navigate for potential dispensary business owners. It helps to be able to call on the seasoned advice of a cannabis business lawyer to obtain the necessary permissions.

How to open and manage a dispensary

Since the passing of the Cannabis Regulation Act, opening a cannabis dispensary has been one of the most popular lines of inquiry from interested entrepreneurs in New Mexico.

You may associate cannabis dispensaries purely with medical cannabis. Such dispensaries have been operating in New Mexico since 2010. As of April 2022, recreational cannabis dispensaries are also set to be a feature of our towns and cities.

Applying for a dispensary license and opening a dispensary in New Mexico is no cakewalk. You will be up against thousands of competing applications and must show how you will meet strict compliance regulations for age limits. purchase limits, dispensary packaging and labeling, POS and inventory management requirements, excise taxes, etc.

You must also show in your employment plans that you will encourage social and economic diversity.

It will generally take around 6 to 12 months of preparation before you can launch your dispensary.

Here are the basic steps you will need to follow after you obtain your license and before launching:

1. Create a business plan: all good startups have a business plan but, as a cannabis dispensary, yours should show how you will meet compliance requirements as well as the standard financial projections and other information.
2. Invest in an inventory management/POS system: this is a legal obligation for dispensaries. Most dispensaries use a robust cannabis POS system with an efficient approach to inventory management.
3. Select dispensary hardware: choose scales, displays, drawers, scanners, tablets and other equipment that is compatible with your POS/inventory management systems.
4. Set up ecommerce/delivery services: medical marijuana patients can order online and have the products delivered and this is expected to be rolled out to recreational users in 2022.
5. Target the right customers: you will need to spend time and money on marketing your business, establishing credibility and targeting the right customers.

Get your New Mexico cannabis retail business set up the right way

The cannabis retail industry is only going to get more competitive. There’s no time to lose – but that’s no reason to cut corners. Mistakes are costly and the strongest businesses will be those that have planned ahead.

At Legal Solutions of New Mexico in Albuquerque, our experienced cannabis business lawyers can help you navigate the many legal hurdles to setting up your business. Call (505) 445-4444 to talk to a knowledgeable cannabis lawyer.