Greening-up: Cannabis sales in Farmington top $666,000 in April
State sales just short of $40 million during first month of legal weed sales
FARMINGTON — Farmington’s cannabis shops rang up just over $666,135 in medical and adult use sales during April, the first month of legal recreational sales in New Mexico, the state reported on May 3.
That figure is just a fraction of the nearly $40 million sold statewide, with population centers Albuquerque, Las Cruces and Santa Fe leading the sales pack.
Border cities Hobbs and Sunland Park also got their share of sales, breaking the $1 million mark along with seven other cities and ending up in the top five for overall sales.
“New Mexicans showed up on April 1 ready to support local businesses selling high-quality New Mexico products, and they’re still coming,” Cannabis Control Division director Kristen Thomson said in a news release “Thanks to hard work by the dedicated people working in the industry, supply easily met consumer and patient demand. New Mexicans have a lot to be proud of in the launch of this new industry, which is already adding value to the state’s diverse economy.”
Medical sales brought in more than $17.3 million in April statewide, while adult-use sales amounted to $22.1 million.
New Mexico collects taxes on adult-use cannabis sales, but medical cannabis sales are tax exempt. The amount collected will be known when the first tax payments from recreational retail businesses come due May 25.
Just how much revenue will recreational sales bring to Farmington? City officials are not willing to float an estimate, waiting for the May 25 date and subsequent state reporting to yield a solid number.
The amount of recreational cannabis sold in Farmington during April was just over $413,943.
“First off, we will not know how much will be returning to the city until we receive the report from the state,” said Farmington Marketing & Public Relations Specialist Christa Chapman. “The report is expected sometime in mid-June. That said, we know that products that contain cannabis and its derivatives are charged an excise tax of 12%.”
Tax distributions are governed by a state code, Section 7-1-6.68 - Distribution—Cannabis Excise Tax—Municipalities and Counties, which says that the city doesn’t share tax revenues with the rest of the county. The money goes to the place the product was purchased.
“Local governments will receive 1/3rd of the total cannabis excise tax revenue collected in their location,” Chapman said via email. “The revenue is not shared between municipalities and counties; the revenue is distributed to a municipality if the underlying sale takes place within the incorporated area and to the county in the case the sale takes place in the unincorporated portion of the county.”
Also of note, Chapman said, is that retail of adult-use cannabis sales are also charged the gross receipts tax (GRT).
On May 5 the state's Taxation and Revenue Department sent out a reminder to cannabis retailers that GRT is part of the tax formula.
"Gross Receipts Tax should be figured on the total sales price, including the excise tax amount," said the news release from spokesperson Charlie Moore. "For example, a retailer in Albuquerque who sells $100 of adult use cannabis would pay 12% in excise tax on that sale. Then, when determining the Gross Receipts tax due, the retailer would apply the Albuquerque Gross Receipts Tax rate – currently 7.875% – on $112 (sale price +excise tax) to come up with gross receipts tax due of $8.82."
Farmington's GRT is 8.3750%.
The state has pledged to make cannabis sales and tax collection figures public.
“Moving forward, the Cannabis Control Division will release sales numbers on a monthly basis, with data being available at the beginning of each month for the month prior," the Cannabis Control Division news release said.
Sales of adult-use cannabis were legalized as of April 1 after the Cannabis Regulation Act went through the Legislature and was signed by Gov. Michelle Lujan Grisham last year.
The state projects that the cannabis industry may “generate $300 million annually in sales, create 11,000 jobs and bring in $50 million in state revenue in the first year alone,” the news release said.
Two more cannabis retailers have made progress toward getting a City of Farmington business registration.
"The Alchemist at 115 W Main St has been issued a business registration for recreational cannabis sales," City Clerk Andrea Jones said via email May 4. "Dreamz Dispensaries at 3501 E Main St, Ste I-2 has been issued a temporary business registration but cannot be open to the public until additional fire-related requirements are met."
Contact John R. Moses at 505-564-4624, or via email at email@example.com.
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