New Mexico's cannabis industry is preparing for life in the time of the coronavirus. Dispensaries are analyzing how to keep their operations more sterile, and producers are trying their best to deal with supply chain issues out of China that could leave them short of packaging and vape components. So far, supplies are holding up for medical patients, but the state's limited canopy capacity could lead to shortages down the line.

Cannabis Industry Warily Watches Virus
Immunocompromised patients, dispensary operators and cash handlers take precautions for COVID-19

Regional News

NM Tax department files appeal on medical weed

The New Mexico Taxation and Revenue Department has appealed a Jan. 28 ruling by a state Court of Appeals that would free medical cannabis from taxation.

The logic of the deduction is that cannabis is a medication, and prescription drugs are exempt from state taxes in almost every state. The case began after a cannabis provider in 2014 applied for a gross receipts tax refund from the state and was denied. The Court of Appeals ruled that the gross receipts tax exemption was in line with the Lynn and Erin Compassionate Use Act.

The state Supreme Court may choose to decide on the case, but it has no time frame obligations to do so.

New Mexico ranks 7th for dispensaries per capita

The state achieved the ranking due to the strength of its medical cannabis program, which is the ninth highest in terms of revenues raised. The study by Verilife measured New Mexico's per capita dispensary ratio at 5.2 per 100,000 people.

Santa Fe, which has 10 dispensaries and counting, has even more, with 5.9 per 50,000 people. It is in the top 5% of cities with a high dispensary number per capita nationwide.

No medical program reciprocity until July

The state medical cannabis program includes provisions that allow medical cannabis patients from other states to get cannabis in New Mexico with their cards, and vice versa – but that aspect is unlikely to launch before July.

Dominick Zurlo, head of the Medical Cannabis Program, said Department of Health Secretary Kathyleen Kunkel signed off on a rule change to delay implementation until July.

The issue is that the state seed-to-sale tracking system needs upgrading, and is not yet ready to deal with the demand, Zurlo told NM Political Report.

Around the Web

COVID-19 threat sparks runs on cannabis stores

Across the country, cannabis stores are reporting an uptick in activity as people stock up in preparation for a nationwide lockdown due to the coronavirus.

In Boston, NETA, one of the largest dispensaries, has moved to online ordering and pick-up service only, as have several others around the country. In Chicago, MOCA Dispensary has gone medical only and stopped all recreational sales during the crisis. In Seattle, Have a Heart dispensary is limiting the number of customers it allows in stores at one time.

Even the Dutch are worried about weed supply

Cannabis aficionados in Amsterdam and across the Netherlands lined up en mass to stock up on cannabis through the Dutch "coffee house" system before the government shut them down due to the coronavirus.

The announcement of the closures came on Sunday, along with the announcement to close Dutch schools.

Dispensaries on the border with Germany also saw an uptick, as Germans fear a border shutdown due to the virus as well.

Virus threatens small weed businesses nationally

Small cannabis companies—especially those that are just setting up in newly licensed states—are severely threatened by supply chain issues and strapped finances as the coronavirus lockdowns begin across the nation.

The Small Business Administration has offered low-interest federal disaster loans during the outbreak, but it's uncertain whether cannabis businesses will be included.

Cannabis businesses also face packaging shortages and shortages of components like vape pens due to supply chain issues out of China.