Legal weed in NM may be a buzzkill for Colorado dispensaries

Duke Rodriguez, CEO of Ultra Health, sees opportunity for dispensaries in New Mexico to capitalize on business from out of state. (Roberto E. Rosales/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

Legal recreational cannabis has been an economic boon for Trinidad and many other small towns across Colorado’s southern border.

But New Mexico’s recent legalization of recreational cannabis could force dispensaries in the region to adapt to shifting demand as operators in New Mexico begin setting up shop and adopting similar strategies.

Kim Schultz remembers what Trinidad was like before cannabis took over. When she moved to the area in 2003, the city was in a boom-and-bust economic cycle as such important industries as coal and natural gas closed up shop.

Left in their wake were high unemployment rates, a declining population and vacant buildings throughout downtown.

“We had a huge attrition out of here of professional people and skilled workers,” Schultz said.

Vacant buildings in Trinidad, Colorado, were filled by cannabis-related businesses after recreational cannabis became legal in the state. Now, there’s concern the businesses may take a hit when recreational cannabis becomes legal in New Mexico a year from now. (Andy Stiny/For the Journal )

But when Colorado legalized recreational cannabis in 2014, Trinidad – 15 miles from the New Mexico border on a heavily trafficked interstate – became a hot spot seemingly overnight.

Investors suddenly began speculating on buildings that had been abandoned for years and various cannabis businesses began popping up around town.

Today, the town of nearly 9,000 has close to 30 dispensaries.

Schultz, who co-owns the Trinidad Higher Calling U dispensary, said the cannabis industry has been an economic boon for the region.

“We’ve had a bunch of people migrate here from Denver … and bring a whole new culture and a whole new age group to Trinidad,” she said. “We’ve had this happen virtually overnight.”

However, many in southern Colorado acknowledge that buyers from New Mexico and Texas make up the bulk of their customers. With that comes a lingering concern that they may start shopping in New Mexico instead.

Dustin Sisneros, who works at High Valley dispensary in Antonito, Colorado, just across the state line, estimates that 60% of his customers come from New Mexico. While he expects a hit to revenues, he thinks such towns as Trinidad and Durango, which have dozens of dispensaries, will feel the impact even more.

“We are concerned,” Sisneros said.

For Ultra Health CEO Duke Rodriguez, that kind of impact is all part of the plan.

Estevan Mendoza, a budtender at Ultra Health in Santa Fe, measures out a gram of Red Dragon for a medical marijuana patient. By next year, dispensaries in New Mexico will be selling recreational cannabis. (Eddie Moore/Albuquerque Journal)

Rodriguez, who oversees about two dozen dispensaries across New Mexico, said his company will attempt to cater to New Mexicans and Texans who would normally travel to Colorado for cannabis.

“It’s more than a hope – we fully intend to impact the need for New Mexico residents to cross into Colorado,” he said.

Part of that strategy mimics that of Trinidad and other southern Colorado towns. In recent years, Ultra Health has set up dispensaries in such border towns as Clovis, Clayton and Sunland Park, all of which typically cater to those traveling to and from Texas.

Rodriguez estimates Texans will eventually account for 42% of New Mexico’s recreational cannabis market.

But legalization has raised concerns that they will buy cannabis in New Mexico only to transport it back to their home state, where it’s still illegal.

Rodriguez said his company is aware that some customers will most likely take cannabis across state lines.

“We are cautioning folks that what you buy in New Mexico you should consume in New Mexico,” he said. “We’re not being naïve and realize that there will be some adults who will likely cross state lines.”

In some cases, though, that might be easier said than done. Major highways leading to Ultra Health’s Sunland Park location a mile from the state border all cross through Texas first. People can access the rest of New Mexico without crossing state lines only via more rural roads.

Still, the potential boon from cannabis has some New Mexico areas excited about the possibilities.

In Clayton, near the state’s borders with Texas and Oklahoma, City Manager Ferron Lucero said his town is already starting to talk about rezoning parts of the city to allow more dispensaries to open.

Lucero said Clayton officials have talked with those in Trinidad about the pros and cons of legal cannabis, and that the potential for more industry is desperately needed in the area. Ranching, along with government jobs at schools and the local prison, make up the bulk of available work.

“(Trinidad) had a lot of buildings that were boarded up and vacant, and other businesses moved in there,” Lucero said. “If the same thing were to happen here, that would be a positive.”

Not everyone, however, is as optimistic about the potential benefits of legal cannabis.

Raton City Manager Scott Berry, whose town sits along I-25 just across the state line from Trinidad, said legal cannabis has been available for several years, given the proximity to Colorado. He doesn’t, however, see Raton reaping any economic benefits from the industry in the future.

It’s not that the town couldn’t use it. Raton has often faced the same economic struggles that have befallen Trinidad – Berry estimates there are around 200 vacant buildings across the city.

For him, though, competing against the dozens of dispensaries only 20 or so minutes away seems like a tall order.

“They’ve been established for years, they’ve got a leg up,” Berry said of Trinidad. “There is an expectation that it’s going to bring that financial boom to the area – I’m a little pessimistic about that.”

Many dispensary workers in Colorado are making the same calculation. Multiple “budtenders” told the Journal the area will have around five years before a toll really sets in, given the vast variety of products available.

Schultz said that, in Trinidad, buying cannabis isn’t just about buying edibles during a pit stop. It’s becoming an experience unto itself, making Trinidad a cannabis tourism destination.

“There are so many shops and so many different things to buy,” she said.

But there is an acknowledgment that Trinidad cannot simply rely on one industry – it’s a mistake the area has made before, and Schultz said she hopes the city expands into more growing operations and other sides of the cannabis industry apart from retail.

Because, as one Trinidad dispensary employee told the Journal, cannabis isn’t just the hottest job in town. It’s quickly becoming the only one.

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