New Mexico Market in 2025: What to Expect
The dream of green to gold in the Land of Enchantment is looking more like a dust-choked mirage. While other markets are thriving or stabilizing, New Mexico is knee-deep in a brutal price war, a sea of licenses, and consumer confusion that makes selling premium products feel like trying to peddle foie gras at a gas station.
Let’s break it down.
Oversaturation and the Race to the Bottom
New Mexico has handed out over 1,000 adult-use licenses — second only to California — but only around 670 are actively making sales. That’s a whole lot of shops chasing a shrinking pile of cash. It’s created a hyper-competitive, margin-killing landscape where everyone’s dropping prices just to stay in the game.
The average basket size is already down 10% year-over-year to $39, and it’s expected to dip below $36 by summer. Consumers just aren’t spending the way they do in more affluent markets. The median income in New Mexico hovers around $52K. If a budtender can’t explain why a product is worth a few extra bucks, it’s staying on the shelf.
Confused Consumers, Weak Sales
Ask a customer in New Mexico about the difference between gas station edibles and dispensary gummies and you’ll get a blank stare. Throw in the alphabet soup of Delta-8s, Delta-9s, distillates, and resins, and it's no wonder they're grabbing the cheapest thing with THC on the label.
This confusion doesn’t just hurt education — it murders margins. When a customer doesn’t understand what they’re buying, they default to the cheapest option. Which, in New Mexico, is very cheap.
2025: Grim Forecast
In January 2025, total adult-use sales were $45.7M — down $1M from the year prior. This marks the second straight month of year-over-year decline. Margins are evaporating, and the writing’s on the wall: we’re in for another 20% price drop unless the market course-corrects.
The strong are getting stronger, and everyone else is bleeding out. Only the most efficient, strategic, and well-funded businesses stand a chance at survival - and that doesn’t just mean MSO’s, as home-turf players are reaping the rewards of lower overhead.
How Bad Is It? Let’s Look at the Numbers
According to the data:
New Mexico has the worst revenue per license in the U.S. at just $600K.
Over half of dispensaries (56%) are unprofitable, averaging just $272K in annual revenue.
After accounting for 280e taxes and basic SG&A expenses, the market is in the red — -$79M in net cash.
This isn’t a storm. It’s a flood — and most businesses forgot their life jackets.
Growth Has Stalled in Core Markets
In Q4 FY’24, only 8 of the top 20 markets in the state saw any growth — and almost all of them were border towns or destination cities.
Albuquerque: Down -2.0%
Santa Fe: Down -6.3%
Las Cruces: Down -3.7%
Ruidoso: Tanked -10.9% in Q4 after a brutal -27.2% in Q3
Meanwhile, places like Sunland Park (+27.4%), Gallup (+17.9%), and Jal (+14.9%) are thriving thanks to cross-border traffic — especially from Texas.
In short: core markets are cooling off, and out-of-state buyers are keeping some towns afloat.
Wholesale Prices: Rock Bottom
Here’s what wholesalers are charging:
Concentrates
Wax 1g: $5.00
Live Resin 1g: $8.50
Rosin 1g: $15.00
Edibles
Chocolates: $5.00
Gummies: $5.25
Drinks: $5.75
Vapes
510 Thread 1g: $5.00
AIO 1g: $8.00
AIO 2g: $12.00
AIO Rosin 1g: $15.00
These are California-level wholesale prices, but New Mexico doesn’t have California’s population, income, or brand loyalty. You’re either selling high volumes at low prices or you’re sinking.
What You Need to Know
New Mexico is flooded with licenses and low on disposable income.
Consumer confusion is rampant, making it hard to upsell or differentiate quality.
Wholesale prices are scraping the bottom, forcing retailers into a volume-over-margin deathmatch.
Core cities are shrinking, while border towns are the last places showing growth.
More than half the market is unprofitable.
If you’re not running a tight, efficient operation with a clear pitch and access to low-cost inventory, you’re not long for this market.
