Legalized cannabis industry in New Mexico to create new jobs, unprecedented annual revenues
(Albuquerque) – A recent economic report produced by Kelly O’Donnell, Ph.D., of O’Donnell Economics and Strategy found the legalized cannabis industry in New Mexico would total $412.5 million in annual revenues after the first year of implementation and $677.7 million by 2021.
The report, commissioned by Ultra Health® with support from the Drug Policy Alliance,Rio Grande Foundation and a consortium of industry advocates, also found that legalized cannabis would create more than 11,400 jobs – 6,600 in the direct cannabis industry and 4,780 in ancillary positions.
"Legalizing cannabis could have a profound effect on New Mexico’s economy and help fill New Mexico’s yawning budget gap,” Dr. O’Donnell said. “But to achieve the benefits of a robust cannabis market, state policymakers must insist on common sense regulation and sound tax policy.”
A new report, commissioned by medical marijuana producer Ultra Health, found that, if marijuana is legalized for recreational use in New Mexico, the industry could bring in $412.5 million in annual revenue in the first year and $677.7 million five years after legalization.
The report estimates that more than 40 percent of this new revenue would come from out-of-state tourists who buy marijuana while visiting New Mexico, and the rest would mostly come from individuals who currently use cannabis illegally. Kelly O'Donnell, of O'Donnell Economics and Strategy, authored the report. According to the organization's website, she worked in former Gov. Bill Richardson's administration in a number of positions, including as director of state tax policy. Her report found that legalizing medical cannabis would create 11,400 new jobs in the state in the first year. The Drug Policy Alliance and the Rio Grande Foundation joined industry advocates in providing support for the report's creation.
According to the New Mexico Department of Health, there are almost 27,000 patients with medical cannabis cards, meaning there are currently almost 27,000 people with the ability to consume cannabis legally, under restrictions. The report estimates that 138,000 people over 21 in New Mexico use cannabis illegally, and 48,000 of those people use it daily. If all of these people were able to legally obtain cannabis, the report estimates that they would consume 57.3 metric tons of it. The report says 6.3 metric tons is currently produced in the state.
A lot of the data O'Donnell points to comes from Washington and Colorado.
Still, that kind of tax revenue could have a big impact on a state like New Mexico. According to Colorado's department of revenue, cannabis taxes, licenses and fees have brought in $97.7 million for the state during fiscal year 2015/2016. Tax revenue for New Mexico would depend on the size of taxes levied on the industry.
Another question has to do with cannabis tourism. In her report, O'Donnell, based on Colorado's experience, estimates that 40 percent of cannabis sales will come from out-of-state visitors. She cites 119,000 Texas residents who reported using marijuana in the last year who live only 200 miles from the New Mexico border as possible consumers. The question is, with Colorado's cannabis industry so close, would people choose to come to the Land of Enchantment? The Santa Fe New Mexican reported a record 33 million visitors to the state in 2014, and t he Denver Post reports that 77.7 million people visited Colorado in 2015.
Still, O'Donnell isn't estimating that New Mexico's cannabis industry will match Colorado's; she's estimating much lower numbers than our neighbor is seeing, and she is quick to point out that the true success or failure of a recreational cannabis industry will be mostly decided by the regulators who make the rules and process business licenses.
North of Las Vegas's bustling, fluorescent strip sits the Paiute Nation tribe. Like many other Native American tribes across the United States, they've suffered from and struggled with poverty, depression, and alcoholism. With dwindling numbers—only 56 adult members currently remain as a result of blood quantum laws—the Paiutes are facing the reality of losing their culture forever.
As detailed on last week's episode of VICELAND's Weediquette, the Las Vegas Paiute Smoke Shop is the lifeblood of the Paiutes, providing the reservation with 85 to 90 percent of its revenue. With the tribe's fragile economic stability threatening to buckle, tribal leaders are searching for new ways to utilize the smoke shop for a desperately needed revenue boost.
Enter Duke Rodriguez, founder and CEO of the Arizona-based medical cannabis company Ultra Health. Before founding the company, Rodriguez oscillated between positions in government and healthcare, making him the ideal candidate for the booming medical cannabis industry. "You need to have a medical background to communicate with the Department of Health Services," he tells me over the phone. "You have to understand about dispensing and how clinics operate."
Founded in Arizona in 2011, Ultra Health assisted those who won licenses for medical cannabis to establish the state's first dispensaries and cultivation facilities. It didn't take long for Rodriguez to realize that tribes like the Paiutes were ripe for the benefits—and astronomical profits—cannabis could provide. With the lofty goal of harvesting 18,000 plants every three months to generate more than $100 million in revenue, those numbers are exactly what the tribe needs to end the financial decay that threatens their existence—and traceability systems to monitor cannabis growth ensure that those profits stay within the tribe and out of the federal government's hands.
We spoke to Rodriguez about Ultra Health, cannabis's distorted history within the United States, and the plant's potential to empower the country's sovereign nations in operating their own forms of trade both with and separately from the United States government.
VICE: How did you establish yourself in the cannabis community? Duke Rodriguez: Cannabis [use] in states like Arizona, Nevada, New Mexico, and Colorado all started as medical programs. They weren't recreational. So from day one, we've focused on medical cannabis.
Does Ultra Health work on legislative efforts toward wider cannabis legalization?
Without a question, yes. In New Mexico, we supported legislation that got to their senate floor earlier this year. We produced studies, did surveys, presented to legislators, and contributed to politicians. There's no question that we're actively and politically engaged.
What made you so passionate about cannabis?
We all had some exposure in college—we inhaled and experienced it. Once you begin to understand the pejorative nature of marijuana, though, you really understand the medical value of cannabis. Most Americans tend to believe marijuana and cannabis are the same, but that's not true. It's somewhat ignorant to call it marijuana—no offense, but it is.
How did the term "marijuana" come to be widely used?
Around the world, no one uses the word "marijuana." It's not a scientific term—there's no plant in the world called "marijuana." The genus is cannabis. In the 1930s, Harry Anslinger was the former deputy of the Department of Revenue for alcohol; prohibition had ended, and he faced an elimination of one-third of his entire agency, so they found a new boogeyman. Cannabis was 100 percent legal at the time, and they didn't go after the other products that were legal at the time—opium, cocaine—because they didn't want to target the majority white population. So they came for cannabis, which was actively and safely used by minorities—particularly Latinos, blacks, and Native Americans. Anslinger needed something to scare people, so he came up with the phrase "marijuana." That's all it is. There's no science behind it. Understanding history makes you never want to use the word "marijuana" again. It's very offensive.
What drew you to working with Native American tribes?
We recognized from day one that if anybody's going to positively utilize cannabis in this country, it's native people. They have many competitive advantages—they own land, they have water and access to power, and they have a historical and cultural tie to cannabis and natural healing. They also have a distribution network—smoke shops, reservations, and casinos across the country. It's clear that cannabis will bring what casinos originally did for tribes to the next level. We started communicating with and educating tribes across the country. It's a long process.
We worked with the Paiute for more than two years. You have to overcome 85 years of prohibition—of being told "just say no," of the tribe not having economic independence, and of their sovereignty being violated. It's not an easy process for them to overcome, and they're doubtful sometimes. They wonder what's really in it for them—is this going to be another venture taking advantage of the tribe?
How far have you come with the Paiute tribe's medical cannabis effort?
We've successfully broken ground on their main street, and we're actually building what is likely to be the single largest cultivation facility in the United States, as well as the single largest Native American venture into cannabis. It's being watched by everyone from federal authorities, to other tribes, to the state of Nevada. By late fall of 2016, there will be plants cultivated on Native American land, and we hope to have a firm opening this coming January.
The Weediquette episode addresses how other tribes' attempts at growing medical cannabis have failed. How are the Paiutes' efforts different?
There's always the potential of the feds coming in—they'll never be able to seize the property because it belongs to the sovereign nation, but they could potentially arrest individuals, including myself. But the Department of Justice has been very clear: If you operate within the state's rules, and your system is "robust and compliant," you don't have to anticipate that the feds will step in. The biggest problem is the potential for the product to end up in the black market—but we've been transparent. This is a relationship between the federal government and the tribe, not the tribe and the state. If we respect the rules of the federal government, the federal government will respect the role of the sovereign nation.
What do you see for the future of sovereign nations and cannabis?
We'll continue to invest ourselves and our efforts in partnering with tribes across this country. We've already made that model quite visible in Nevada—it's brought the interest of many tribes across the country who have made the pilgrimage to Las Vegas to see what the Paiutes have done there. Most of them are walking away not only impressed, but also contemplating what it could do for their people.
Over time, a good majority of the 600 tribes across the country will at some point be actively engaged in cannabis. Whether tribes will be able to move projects from tribal nation to tribal nation unfettered will be the game changer. Imagine the powerful logistic system the tribes will have when that happens. These are separate governments, and their relationship is not with the state—their treaties are between that tribal nation and the United States government, and every one of these tribes has a right to enter into relationships with the United States government, and other tribes, and to have trade with those tribes uninterrupted by the United States government.
ALBUQUERQUE, N.M. — The brief appearance of a pot plant at the New Mexico State Fair on Thursday set off a kerfuffle that prompted officials to boot out a medical cannabis producer from the state’s big show.
State Fair officials acknowledged Friday that cannabis grower Ultra Health informed them in August that its display would include at least one live cannabis plant.
Event managers apparently hadn’t noticed the mention of a cannabis plant in the application materials until Ultra Health employees brought Dorothy – a 21-day-old female plant – into the Manuel Lujan Jr. exhibit complex.
Also Friday, New Mexico Department of Health officials questioned the legality of displaying a cannabis plant in public.
Duke Rodriguez, owner of Ultra Health, said he provided State Fair officials with a graphic representation of the display, including a “secure area where people can view cannabis plants.”
The graphic was among the materials Ultra Health submitted to the State Fair in August when the firm submitted its application for a exhibition booth, State Fair spokeswoman Erin Thompson said Friday.
But the graphic, and mention of the cannabis plant, “just got overlooked,” until this week, Thompson said. The State Fair intends to refund the $2,000 fee Ultra Health paid for the booth, she said.
State Fair managers decided late Thursday to bar the display after state Department of Health officials said that Ultra Health lacked authorization to display a cannabis plant in public, Thompson said.
The Department of Health, the state agency that oversees the medical cannabis program, said in a written statement Friday that Ultra Health may have violated the state’s medical cannabis law by displaying a plant outside a secured production facility.
“We are looking into the matter to determine what if any disciplinary action is appropriate,” DOH spokesman David Morgan said in a written statement.
The state’s Lynn and Erin Compassionate Use Act law calls for “cannabis production facilities within New Mexico housed on secured grounds and operated by licensed producers.”
Rodriguez responded that the cannabis plant on display at the State Fair was an immature plant that was not actively involved in the production medical cannabis. The site was securely controlled by Ultra Health employees, he said.
“There was no production occurring,” he said. “Medical cannabis production relates to the growing of plants, not to the displaying of plants.”
BERNALILLO, N.M. (KRQE) – The Department of Health is not too thrilled that a state-licensed medical marijuana greenhouse was used as the setting for a music video.
There are concerns about security — and that it glamorizes smoking something that’s supposed to be used for medicine.
The medical marijuana company could be in big trouble now, however, they insist they did nothing wrong.
This music video shows one local artist talking about his love for his hometown of Albuquerque. But the primary location of the shoot, a state-licensed medical marijuana producer’s greenhouse in Bernalillo, is now under fire.
“We just said yes, we would love to be a part of it. We thought it was fun,” said Leonard Salgado, Ultra Health.
Ultra Health agreed to the request, no questions asked. However, the state’s Medical Cannabis Program did have questions. Ultra Health said they received an email last week from the Department of Health asking about the video shoot.
But insists they didn’t do anything wrong.
“There aren’t any rules of regulations that would prohibit us from shooting any kind of video,” said Salgado.
Ultra Health is one of 35 state-licensed producers in New Mexico. KRQE News 13 reached out to the Department of Health, and were sent this statement.
“Licensed producers are required to have security policies and procedures in place addressing personal safety and crime prevention techniques.”See NMAC 18.104.22.168 SECURITY REQUIREMENTS FOR LICENSED PRODUCERS
KRQE News 13 spoke to substance abuse counselors in town, and their main concern is that the video glamorizes marijuana.
“It’s very influential, we see it on television, we see it on movies and of course, friends and family have a serious impact on drug and alcohol abuse,” said David Lepori / A New Awakening, Substance Abuse Counselor.
Ultra Health said that wasn’t the point.
“It was really to promote New Mexico,” said Salgado.
Ultra Health has not responded to the email from the state yet, the company has until Sept. 16 to do so.
Like all the medical marijuana producers in the state – Ultra Health is required to have extensive security measures in place. The company said the video crew was supervised closely.
The state’s largest medical marijuana distributor, Ultra Health, was kicked out of the state fair after it set up a booth it thought fair officials had approved.
The booth contained a three week old female medical cannabis plant, named Dorothy, which was on display for fairgoers.
"To be able to display the plant and bring down some of the stigma associated with cannabis,” said Leonard Salgado, Ultra Health's vice president for business development. “That was our goal."
Salgado said Ultra Health it told the fair about Dorothy it in its application for the booth, which was approved.
"We informed them and sent them a picture of what the display was going to contain including the plant," he said.
But on the first day of the State Fair, officials told them to take the booth down and leave the fair grounds.
"Someone within the fair organization decided that there must have been some miscommunication and they advised us that we needed to remove the plant and really remove any type of brochure or literature that had the cannabis leaf symbol," said Salgado.
The state fair says it was an oversight on its part because a manager didn't see an email from the company which said the plant would be part of the display.
Salgado says he has no hard feelings.
"It was disappointing to have to leave on the first day of the fair," he said.
The State Fair will refund the money Ultra Health paid for the booth.
ALBUQUERQUE, N.M. — “Dorothy,” a 3-week-old female medical cannabis plant, made her debut at the opening day of the New Mexico State Fair on Thursday but was booted out before the day’s end.
The plant was on display at a booth paid for by New Mexico Top Organics — Ultra Health LLC.
Her presence was advertised in a company press release as only the second time a cannabis plant has made an appearance at a state fair in the United States, given that marijuana is still illegal at the federal level and is authorized in New Mexico for certain medical conditions.
“We hope that the fair will raise the profile of medical cannabis as an agricultural asset in New Mexico, similar to the Hatch green chile, pecans and piñon nuts,” Duke Rodriguez, CEO of Ultra Health, one of the state’s 35 licensed medical marijuana producers, said in the press release.
But after Ultra Health set up the booth, a State Fair manager told Rodriguez that “there has been a huge mistake” and asked him to remove the plant, together with printed materials that contained images of cannabis plants, Rodriguez said in a phone interview late Thursday. Initially, State Fair personnel agreed to let the booth remain through the end of the day.
But a State Police officer later approached Rodriguez and said he needed to remove the plant and other items immediately, he said.
Ultra Health had signed a contract with the New Mexico State Fair and paid a $2,000 fee for a booth, Rodriguez said. “We disclosed the items that would be there, including a plant,” he said.
David Morgan, public information officer for the state Department of Health, said the department plans to investigate because the production of medical cannabis is supposed to occur in a secure facility approved by the state.
“We are looking into the matter and will take appropriate action, which can include suspending their business operation or other disciplinary action,” Morgan said in an email to the Journal.
Recently the New Mexico Tourism Department decided to launch its New Mexico True Certified program, highlighting products that are “uniquely New Mexican.” While this is a great program, it is limiting its success by denying access to one of the state’s most promising products.
It’s green. And no, it’s not chile.
The program requires all plant and nonmeat agricultural products to be 100 percent produced in the state with traceable documentation to where it was grown. Ultra Health products fit this requirement, as its high quality, medical grade cannabis and other products infused with medical cannabis are grown and produced at its cultivation center in Bernalillo.
New Mexico is experiencing vast budget shortages stemming from a historically limited private sector economy and lower than expected oil and gas revenues. Rarely, if ever have the state coffers been sufficient to fully fund the programmatic needs for improved education, a stronger justice system and expanded but needed healthcare. Of the three largest budget demands, only one is both a true economic and social positive multiplier to the improved well-‐being of the state’s individual residents and the overall state wide economy: Medicaid. New Mexico is in an envious position of being able to obtain $3 in Federal match for each $1 the State provides. Likewise, every single dollar cut from the Medicaid program results in a combined $4 dollars less being released into our communities for hospitals, caregivers, medicines, healthcare workers, behavioral health services and those who often time care for our most vulnerable populations: single parents, children, working poor, chronically ill, the aged or disabled.