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New Mexico marks one

Jun 12, 2023

FARMINGTON — As New Mexico marked the first anniversary of legalized recreational cannabis sales on April 1, the 150 marijuana-related businesses in the state employed more than 4,500 people, according to an analysis done by a state agency.

The analysis was included in the April edition of the monthly New Mexico Labor Market Review issued by the New Mexico Department of Workforce Solutions. Authored by economists Justin Welby and Rachel Moskowitz, the analysis offers a glimpse at how the industry was faring in some respects after just 12 months of legalized recreational sales, although the state legalized the use of medical cannabis for those with chronic health conditions in 2007.

Welby and Moskowitz found that in the fourth quarter of 2022, there were 151 active cannabis firms registered with the state. Nearly three-quarters of those enterprises, or 112 businesses, were classified as dispensaries operating as storefront or online retail outlets.

Nearly 14% of the remaining firms, or 21 businesses, grew and cultivated plants, according to the analysis, while 10 firms processed concentrates or produced edible and vaping products. An additional four firms were classified as belonging to the wholesale sector, while the remaining four performed other industry-related activities.

As expected, a strong majority of those businesses were located in the four New Mexico counties with the highest population. Bernalillo County led the way with 47 businesses, while Doña Ana County was second with 16. Santa Fe County had 12 businesses, and San Juan County had eight.

Altogether, those businesses employed 4,666 people in the fourth quarter of 2022, according to the analysis, with more than 88% of those folks working in dispensaries. A total of 898,147 people were working across New Mexico in December 2022, according to Department of Workforce Solutions figures released in January, meaning the cannabis industry employed only 0.5% of the state's workforce at that time.

The authors of the analysis examined the quarterly wage records of those workers from the first quarter of 2021 to the third quarter of 2022 to gain an understanding of where they had worked in the past.

They found that more than 39% of those folks already were working in the cannabis industry, while more than 25% of those workers had unreported wage records, meaning they worked in other states, just graduated from school or were self-employed, the analysis states. More than 35% of them came from other industries, with trade, transportation and utilities leading the way at 11.1%, and leisure and hospitality ranking second at 8.4%.

An interesting aside to that aspect of the analysis is the contention by the authors that some of those workers — especially those who worked in the accommodation and food service industries — may have left their previous places of employment for the cannabis industry to make more money. The average weekly wage of those workers increased once they joined the cannabis industry, the analysis found.

In the fourth quarter of 2022, the average weekly wage for workers in the cannabis industry in New Mexico was $560. That was nearly $100 a week more than the $474 weekly wage made by those in the accommodation and food service sectors.

"The data shows that for some people, the grass is greener in the cannabis industry," the authors wrote.

But that $560 weekly wage made by cannabis workers in the fourth quarter of 2022 actually represented a significant decline from the high point of the data included in the study. In the fourth quarter of 2021, shortly before recreational retail sales began, cannabis workers were making an average of $715 a week. The $560 figure is the lowest wage earned by cannabis workers over the last eight quarters and is nearly $100 a week less than cannabis workers were making in the first quarter of 2021, the first period for which data was compiled.

The analysis also found that cannabis industry workers trailed those in the retail trade business and arts, entertainment and recreation industries in terms of weekly earnings in the fourth quarter of 2022. Retail trade workers earned an average of $687 a week, while arts, entertainment and recreation workers earned an average of $658.

Mike Easterling can be reached at 505-564-4610 [email protected].

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