In June of 2021, New Mexico joined the growing list of American states to legalize adult-use recreational cannabis, opening doors for a thriving local market. The Cannabis Regulation Act (CRA) established New Mexico dispensary and cannabis laws and assigned regulatory responsibilities to the Cannabis Control Division (CCD) and the newly-formed Cannabis Regulatory Advisement Committee. For potential entrepreneurs considering opening a cannabis dispensary in New Mexico, the CCD will be the administrator for all licensing and regulatory provisions for both recreational and medical marijuana dispensaries.
If you are interested in applying for a legal dispensary license in New Mexico, you can complete the application process online via the CCD website. But before you submit your application, proper preparation is the key to success. Not only is it essential to familiarize yourself with the cannabis laws, but you should also be well-equipped with a detailed understanding of how to open a dispensary in New Mexico and set your business up for success.
Thousands of applications for recreational dispensary licenses in NM have already been submitted, making it incredibly important to lay the groundwork for compliance, retail operations, effective management, and more. Every part of the process is vital, from learning how much it costs to open a dispensary to selecting a robust dispensary software system.
How to Open and Manage a Dispensary in New Mexico
Plan to spend about 6 to 12 months preparing for your dispensary launch. While it's complex to start any new business, this is especially true for a dispensary. In reality, many of the required pre-opening tasks are ongoing responsibilities you should expect to prioritize consistently. For example, the work involved in obtaining a dispensary license, developing a system for inventory management, and strategizing a marketing plan will be ongoing.
New Mexico has also implemented requirements for cannabis businesses to provide a social and economic equality plan (in addition to other application documents). This means that each applicant must submit a tangible strategy for encouraging social and economic diversity in their employment efforts. Continue reading to learn more about how to open a successful dispensary in New Mexico, as well as tips for sustaining profitability, compliance, and long-term success.
1. Outline a Business Plan With a Focus on Compliance
Every new business must begin with a well-formulated business plan, and a dispensary is no exception. However, dispensaries must pay special attention to incorporating measures to ensure compliance in their short- and long-term business strategies. From day one of operations, all NM recreational and medical marijuana dispensaries must comply with all regulations. Please note that it is the dispensary owner’s responsibility to remain up to date on any regulatory changes, implementing additional requirements as necessary.
Below, we’ve provided a very brief summary of key recreational marijuana laws in New Mexico for quick reference:
- Dispensaries may sell to adults over the age of 21. Proper identification for age verification purposes is required.
- Current purchase limits are set at 2 ounces of cannabis flower, 16 grams of concentrate, and 800 milligrams of cannabis edibles.
- Medical marijuana dispensaries are allowed to obtain a recreational license and operate both entities in a shared location.
- A 12% excise tax is in place until July of 2025, increasing thereafter. This tax does not apply to registered MMJ patients/caregivers.
- All dispensary packaging must include warnings for any potential adverse events, the NM poison control hotline information, and be child-resistant.
- All NM dispensaries must utilize a compliant cannabis POS and inventory management system, that integrates with BioTrack, the state’s official cannabis monitoring system.
Please be aware that the above is merely a succinct summary of regulations and should be used as a singular source of legal information or advice.
2. Prioritize Inventory Management
Effective inventory management is more than merely a smart business practice; it is a legal obligation for your dispensary. Ideally, you will select a robust cannabis POS system that provides an excellent and efficient approach to inventory management.
Invest in a cannabis inventory management system that aligns with CCD regulations. For example, dual-licensed New Mexico dispensaries offering cannabis for both medical marijuana and recreational purposes must reserve a minimum of 10% of inventory for MMH patients. Also, seamless integration with BioTrack is a must. Opt for automated reporting to make the process as convenient as possible.
3. Use a Reliable Cannabis POS System
A high-quality cannabis retail POS system is essential to your dispensary, both for the sake of compliance and service quality/efficiency. Cova’s dispensary POS and inventory management system follows all reporting requirements and seamlessly integrates with official reporting systems, including BioTrack.
Along with providing exceptional-quality performance and reliability, Cova Software also includes all compliance-related features, such as:
- Purchase limit enforcement
- ID scanner for age/card verification
- Integrated tracking and reporting
- Product equivalency conversions
Your cannabis POS system is one of the most significant investments you will make in your business. The right system will equip your dispensary with the tools and efficiencies necessary for building a flourishing business.
4. Choose Dispensary Hardware
In addition to software, you will also need to outfit your dispensary with hardware staples such as scales, displays, drawers, scanners, and tablets. Before purchasing dispensary hardware, confirm that your selected option(s) are compatible with your preferred POS/inventory management systems.
5. E-commerce and Delivery Services
Online ordering and delivery are presently available for NM medical marijuana dispensaries and are expected to be allowed for recreational dispensaries in 2022. Regardless of whether you are launching an MMJ or recreational dispensary, developing a plan for online ordering and cannabis delivery is key. These options are closely regulated, and a well-designed POS system with native E-commerce tools will be a must. Prepare yourself with a strategy for the required data collection, documentation, reporting, and seamless integration so that your online cannabis store is a true reflection of your overall cannabis retail business plan.
6. Stand Out From Competitors
Once the recreational cannabis market starts booming in New Mexico, competition may be intense among new and existing dispensaries alike. Therefore, determining how you will set your business apart from your competitors should be a major focus. Ask yourself: what will your dispensary offer that others in your area do not? Perhaps you will hone in on a niche market and selection of products, create a unique dispensary shopping experience, or even make a name for yourself as a leader in quality service. Make it a top priority to build a brand that encompasses your dispensary’s mission, key principles, etc.
7. Know Your Target Market
Understanding your target NM cannabis customer will make it easier to strategize effectively for marketing and daily operations alike. For example, a well-rounded cannabis tracking and reporting system can provide valuable data about your dispensary traffic, demand for certain products, and other details that can help you understand your market better. As a result, you can make smart decisions about product supply, advertising, and other aspects to achieve a rise in profitability.
Choose the Right Cannabis Technology Partner
Cova has built trusted relationships with both local and national dispensaries, supporting the launch of a diverse array of cannabis businesses. If you’re considering launching a cannabis dispensary in New Mexico, Cova POS software is an essential tool for balancing compliance, profitability, and customer service. With our innovative cannabis retail software, you can streamline daily operations and hone in on sustainable success. Sign up for a free cannabis POS software demo today and discover how Cova can help you establish a successful dispensary business in New Mexico.