New Mexico Struggles with Black Market and Lack of Enforcement
New Mexico's cannabis industry, celebrated for surpassing $1 billion in sales since recreational legalization in 2021, is facing significant challenges due to weak regulatory enforcement and a booming black market. Investigative journalist Larry Barker's year-long report, alongside insights from Duke Rodriguez, CEO of Ultra Health, highlights major issues that threaten the industry’s legitimacy and economic future.
Black Market Threatens Legal Operators
While New Mexico's cannabis sales have reached $1 billion, Rodriguez argues that only one-third of the market is regulated, with the majority of cannabis transactions occurring in the black market. This is costing the state millions in lost tax revenue and supporting criminal enterprises. Organized crime, including Mexican cartels and Chinese groups, has infiltrated the cannabis industry, with large-scale illegal grow operations in places like Torrance County.
Regulatory Failures
The state’s regulatory framework is inadequate, with only nine inspectors overseeing 3,000 licensed cannabis businesses. As a result, half of these businesses remain unchecked for safety or legal compliance. Unlicensed dispensaries, like those at the El Baile Event Center in Albuquerque, openly sell cannabis and other illegal drugs, posing health risks to consumers and violating state laws.
Rodriguez emphasized that legitimate businesses are being undercut by unlicensed operators who avoid taxes and regulations, making it difficult for them to compete. Many legal businesses have already closed as a result.
Need for Reform
Both Barker and Rodriguez stress the urgent need for stronger enforcement and increased resources for inspections. Without reforms, New Mexico’s cannabis industry risks becoming dominated by illegal activity, further harming legitimate businesses and exposing consumers to unsafe products.
The future of New Mexico's cannabis market depends on the state’s ability to crack down on the black market, enforce regulations, and ensure a level playing field for legal operators.
Watch: The Growing Black Market Inside New Mexico’s Cannabis Industry
