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

Cannabis growers in New Mexico are collectively looking at daily sales numbers to determine what kind of demand there will be a week after recreational sales begin.

The New Mexico Cannabis Control Division reported more than $5.2 million in combined medical and recreational 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 early adult sales, the state’s cannabis industry will likely face a sales surge on April 20, or 4/20, which is typically the biggest day of the year for adults. cannabis sales.

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

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

State law defines a cannabis shortage as a situation where the supply is “significantly” less than the three-month period preceding the effective date of the Cannabis Control Act.

But Rodriguez, who has long warned of an impending shortage and advocated for an unlimited limit on cannabis production, said the cannabis shortage he warns of is different from the legal definition. Rodriguez said the shortage would likely result in a limited supply of certain cannabis products or cultivars. He also said these types of shortages will impact large businesses like his and trickle down to smaller businesses, which are unlikely to be able to cope with a drop in sales, ultimately impacting those dependent on cannabis as medicine.

“We represent 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 carriers, and in those smaller carriers, they’ll eat up their inventory even faster,” said Rodríguez. . “Like a moving glacier, it will simply devour smallholders. Where it takes 25 days to devour Ultra Health, it will take three days to devour a Small Operator.

Rodriguez predicts that the state’s metropolitan areas will be “sheltered” for a while as there are more dispensaries in those areas. But, he warned, those metropolitan dispensaries will eventually feel the predicted shortages.

Probably unsurprisingly to anyone who knows Rodriguez, he said state regulators can “reduce the amount of extended, protracted pain that’s about to be imposed on patients first and then non-patients next,” by allowing growers to grow more cannabis. .

“You can’t make it go away overnight,” Rodriguez said. “But every day that you take away the ability to bring real factories into production, it will just be longer suffering, longer pain and an unstable market.”

However, the state’s cannabis control division is unlikely to increase cannabis production limits anytime soon. Regulators recently told the Santa Fe New Mexican that there were more than a million factories in production, although Rodriguez and others have big doubts about this figure.

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

“The supply issue is pretty real,” Jackson said. NM Policy Report. “But I really, really feel like it was too little too late for the state when they raised the plant limits. But perhaps the only people who could profit from it were established companies. And even then, scaling that fast was basically impossible unless you already had the production space available.

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

“I know some of these guys have really big operations, but they also have a lot of stores,” Jackson said.

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

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

But overall, Jackson thinks any high demand for cannabis will eventually decline and the market will balance out.

Matt Muñoz is the chief innovation and finance officer of cannabis producer Carver Family Farm, which is a micro cannabis company limited to 200 plants. Large companies – or those that aren’t micro – can grow up to 20,000 cannabis plants, depending on the license. Muñoz said he’s not too worried about widespread shortages impacting Carver Family Farm because the company has a relatively quick turnaround time to get cannabis to patients and customers.

“Our perpetual harvest cycle kind of gives us this flexibility that we will always have a product,” Muñoz said. “If we run out, we’ll have some soon after.”

Carver Family Farm also sells plant cuttings or clones to help patients grow their own medicines and sell supplements.

But, Muñoz said, he still thinks there’s a cannabis shortage ahead and that’s likely to have the worst impact on medical cannabis patients.

“I am sincerely concerned for the 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 and we don’t have our manufacturing license, so we can’t supply the edibles that patients need right now. I think there’s going to be a crisis, but I think it’s going to be at the patient level, and that’s really sad.

Ellie Besançon, executive director of cannabis production company Red Barn Growers, said the company was selling “at a faster pace” than originally expected, but thanks to early preparation for adult sales, Red Barn seems to “look good on the supply.”

“At this stage, I still feel comfortable with what we have in store,” Besançon said.

Besançon said she assumes demand for recreational cannabis will decline slightly over the next few weeks or months before leveling off. But, she says, it’s still too early to say for sure.

“At the end of April, I think it will be a good eye-opener for us, as we sort of recover from the madness of this month, opening for recess.[reational-use sales], 4/20. We will have a better idea of ​​where we are, in terms of supply, I think, after this month,” Besançon said.

Dominic Garcia, 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 a shortage. imminent. Garcia said R. Greenleaf has increased production and strengthened supply in anticipation of the new adult cannabis market.

“We are building a brand new facility that will be able to produce a boatload of flowers,” Garcia said. “We were a bit concerned about this late May to June supply window. But what we’ve noticed right now is that this first week hasn’t taken off the way we thought it would. We are therefore quite satisfied with the supply.

Chad Lozano, cannabis patient advocate and co-host of NMCannaCastsaid he personally hadn’t seen any shortages yet, but said things could get ugly if there were shortages, especially of cannabis flower.

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

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

“You don’t have to worry about going anywhere if you’re cultivating for yourself and your autonomy,” Lozano said.

Rodriguez said any cannabis producer of comparable size to Ultra Health that says it’s not worried about a shortage is being “dishonest” so as not to deter potential customers and patients. He said the next “stress test” for how soon his predicted shortage will occur is Friday, a week after the first day of adult sales.

“We need to know if the next seven-day period brings a new trend,” Rodriguez said. “If that lowers the average, then 22 turns into a possible 25 days. If that brings it even lower, 25 days can extend to 28 days. But in any case, the shortage is imminent and inevitable.

About John Tuttle

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