Border towns spurring cannabis market

SUNLAND PARK — Customers begin lining up on a hot Friday afternoon in mid-October at Ultra Health in Sunland Park. Just a three-minute drive away, others are pulling into the parking lot of the building that houses the Pecos Valley Production and soon-to-be-open OSO Cannabis Co. dispensaries.

At both locations, there’s a familiar sight on this “mellow Friday,” as Ultra Health District Manager Jesus Muñoz puts it: a whole lot of Texans. Those customers have been a driving force in Sunland Park’s successful adult-use market.

In New Mexico, more than 1,000 licenses have been approved nearly eight full months into adult-use cannabis sales. And here in Sunland Park, a town of roughly 17,000 that sits directly next to El Paso, a crop of dispensaries have popped up. Sunland Park — like other New Mexico-Texas border towns — has competed with far larger communities like Las Cruces and Santa Fe in cannabis sales, raking in nearly $10 million — and counting — in less than a year.

“The Texas customer is very important to us,” said Leonard Salgado, director of business development and expansion for Pecos Valley Production. “It’s not only Sunland Park, but, obviously, places such as Ruidoso that attract many visitors from Texas. I mean, you can look at their numbers in Ruidoso and you can see that’s what’s driving business there, as well.”

A glimpse at the numbers New Mexico towns bordering Texas have continued to remain relevant in the state’s recreational cannabis industry, spurring economic activity for a plant that still remains illegal in the state many customers are coming from.

Nearly 30% of monthly sales going back to April are attributable to border towns.

In Clovis, state records show adult-use sales from April through October total $4.98 million. Portales has recorded almost $1 million in sales. In Texico, the total is just under $400,000.

In Sunland Park, adult-use sales have also increased steadily since April, right along with the state’s overall sales numbers, according to Cannabis Control Division data. In April, for instance, adult-use sales in Sunland Park stood at nearly $1.2 million. And, in October, the most recent month with sales data, recreational cannabis sales in the border town stood at more than $1.5 million.

Sunland Park recently saw an increase of $164,000 in recreational cannabis sales from September to October — the largest jump in sales for the town to date.

“A lot of people don’t remember that El Paso’s population is as big as Albuquerque’s,” said David De La Rosa, general manager of Ultra Health in Sunland Park.

“Albuquerque has seven Ultra Healths — just Ultra Healths. And, here, we have seven dispensaries.”

Added Muñoz: “The fact that we are so close to Texas does make a difference.”

A Friday in Sunland Park

Customers walk out of the dispensaries in Sunland Park, bags filled with cannabis products in hand. Because of its small size, the dispensaries in this town are in close proximity.

In one part of town, Pecos Valley Production and OSO Cannabis Co. occupy the same building — and, just a short drive away, are Everest Cannabis Co. and R. Greenleaf dispensaries.

“Yeah, you know, it’s really unique,” Salgado said. “Most municipalities that we operate in have a distance requirement from one dispensary to another.”

Car after car pulls into some of these dispensaries in this border town, almost all of them with Texas license plates.

For those from Texas who are over 21, purchasing cannabis from a dispensary is a new experience. To others, it’s just a shorter drive than, say, Colorado. But almost all say the same thing: it’s safer than purchasing from the illicit market.

“It’s better than buying it on the street because at least you get the education from the employees that are here,” said Jason Admire, a resident of east El Paso, who purchased his cannabis from Pecos Valley Production.

“Plus, they’re not going to sell you anything that isn’t tested. ... Off the street, you never know what you’re going to get.”

That’s something Alex Martinez, a resident of Sunland Park who came with two friends in a car with Texas plates, agrees with.

“Nobody wants to deal with bad people,” Martinez says.

“It’s legal. ... It’s like going to buy a beer.”

Shahee Estrada, manager of the Pecos Valley Production location in Sunland Park, says this is a slower-than-normal Friday. But customers, as at Ultra Health, are lining up to purchase cannabis. About seven of every 10 customers are from Texas, he says. But that may be an undercount.

“It is consistently busy,” Estrada said. “We’ve had to double our staff just to make sure we meet the needs of our business. And then, of course, just adaptability — being able to be very flexible to (this) ever-changing industry. We’re kind of learning as we grow.”

Estrada has been at the forefront of cannabis sales, having worked in Denver when recreational sales first began. He said tourists from other states flocked to the city to make legal cannabis purchases. It’s no different in Sunland Park.

Rodrigo Rivas, originally from El Paso, but who now has moved away, came to Sunland Park to buy some pre-rolls — cannabis already packaged in a cigarette-like form. Rivas, who was in town for a wedding, said the legalization of marijuana can prove to be a positive, citing the tax revenue that can be used for education and economic development.

“How New Mexico taxes cannabis ... that’s going to be a good thing (in the long run),” Rivas said.

Looking ahead

Ask any dispensary manager in Sunland Park or cannabis executive what their thoughts are on cannabis sales in this border town going forward and you’ll get the same answer: we’re bullish. That’s because, as it stands, Texas is nowhere near closer to legalizing adult-use cannabis sales.

Texas Gov. Gregg Abbott, a Republican, has voiced his support for reducing penalties for possession of small amounts of cannabis, but has made it clear he is not looking to legalize sales. The closest Texas got to that point was in the most recent race for Texas governor, when Democratic candidate Beto O’Rourke, an El Pasoan, voiced his support for legalization.

O’Rourke lost to Abbott in the general election. So, for now, cannabis will likely continue to bolster the economy of such border towns as Sunland Park. That’s something Salgado of Pecos Valley Production believes.

“I mean, for as long as we can take it, we’re going to take advantage of it,” Salgado said. “Hopefully, Texas does not come on board, you know, with adult-use cannabis for the next five years.”

But there is the issue of oversaturation of the market, something that is happening in such larger New Mexico cities as Albuquerque.

“Everyone who wants to gamble and who is in the Sunland Park market — they need to face reality. This is not going to last forever and for very long,” Duke Rodriguez, president and CEO of Ultra Health, said.

For now, those Texas customers are going to keep on coming — just as Martinez, a New Mexican, and his group of Texas friends had.

“Some people don’t even realize that they’re in another state (purchasing cannabis),” said Julio Perez, operations manager for Cardiel Cannabis Co.

“They’re like, ‘Is this Texas?’”

The Eastern New Mexico News contributed to this report.