Thirty-one organizations licensed to grow and sell cannabis in New Mexico pocketed a little over $1.5 million in the first quarter of 2018, with the majority of the nonprofit dispensaries posting a positive income-to-loss ratio.
In total, dispensaries sold about 1.6 million units of cannabis this quarter. Under Department of Health rules, a unit consists of one gram of dried leaves and flowers of the female cannabis plant, or 0.2 grams (200 milligrams) of THC for cannabis-derived products such as tinctures and edibles.
For the first time, the quarterly reports also include the amount of wholesale cannabis bought or sold for each producer. Because state rules say each producer is limited to growing 450 plants per cycle, some purchase wholesale from other producers in order to meet patient demand.
But these numbers should be taken with a grain of salt.
In total, SFR found 14 producers that reported numbers sold 386,918 grams (853 pounds) of cannabis to other producers. Nine producers purchased 442,595 grams (976 pounds) from other producers.
That leaves 55,677 grams of cannabis, or 123 pounds, unaccounted for. The Department of Health did not respond to SFR's inquiry about why the discrepancy exists.
There are other things about wholesale numbers you can't tell simply by looking at the quarterly report. For example, the licensed cannabis producer Ultra Health says it's the largest purchaser of wholesale cannabis in the state, yet the claim is difficult to verify from the quarterly report because the dispensary R Greenleaf Organics reported buying a greater wholesale quantity.
You also can't know just from reading the reports the specific wholesale arrangements some dispensaries have with others. R Greenleaf Organics receives wholesale cannabis from two other producers, Medzen and G&G Genetics. Both Medzen and G&G Genetics are under contract to exclusively sell bulk weed to R Greenleaf Organics. And all three nonprofits are joined together in a management agreement with R Greenleaf Associates, a for-profit company.
This means that the reported 197,823 and 67,979 grams of cannabis that G&G Genetics and Medzen sold, respectively, all went to R Greenleaf Organics. With this in mind, R Greenleaf Organics' number of wholesale cannabis purchased should come out to 265,802 grams.
But that's not what R Greenleaf Organics reported. Instead, it reported purchasing 265,797 grams of wholesale cannabis, leaving five grams unaccounted for.
What accounts for the very small but outstanding discrepancy? Marissa Novel, a spokeswoman for Ultra Health, says that while self-reporting by licensed nonprofit producers has improved in recent years, numbers aren't always easy to verify, and can still contain accounting errors. (In addition to being the largest seller of cannabis in the state, Ultra Health also closely tracks industry figures in New Mexico.)
"In the past, a lot of reports would be missing from some producers," Novel says. "There would be just little typos and inconsistencies … [but] the producers seem to be a little more accurate in their self reporting [now]."
The benefit to producers reporting wholesale numbers for the first time, Novel says, is that it reduces the chances of health department officials and industry watchers double-counting revenue numbers for producers. In the past, when one producer would wholesale cannabis to a second producer, the second producer could count sales of that cannabis to patients as original revenue, allowing for likely inflation of revenue numbers for patients sales.
"I wouldn't say it was deceptive on the providers' part [to account for wholesale purchases when tabulating revenue in patient sales] by any means; it was just a product of the quarterly reports not being as decisive as they are now," Novel says. "I think as the industry evolves, quarterly reports will get more specific, and we can look forward to better data."
Information from the Health Department also shows that total sales of cannabis products to patients was a little over $24 million and brought in over $1.7 million in gross receipts taxes for state and local coffers in the first three months of the year. The state took in about $7 million in gross-receipts taxes in all of 2017 and with no special earmark for cannabis GRT revenue, that cash goes into the general fund.
Nine producers with dispensaries in Santa Fe reported $8.8 million in total cannabis product sales. They posted nearly $750,000 in net income, but that includes well-established producers like Ultra Health, New Mexicann and Sacred Garden, as well as newer producers, such as Kure Cannabis and Best Daze, whose first dispensaries opened in Santa Fe within the last year.
As of May 10, there were 52,260 medical cannabis card holders in the state, including 5,898 who live in Santa Fe County.