Year in review: Cannabis sales bring in millions across area

Legal recreational cannabis sales have brought millions of dollars of new revenue to Clovis and Portales, and almost $532,000 in business revenue to Texico, according to statistics on the state's Cannabis Control Division website.

Since legal recreational cannabis sales began in April, records show nearly $5.7 million in recreational cannabis retail sales were completed from April to November in Clovis, more than $1.1 million were completed in Portales over that period and $493,998 have occurred in Texico.

The average transaction for Clovis recreational cannabis buyers was for about $59 in November. In Portales, the average recreational cannabis transaction was for $49. In Texico, however, the average recreational transaction came in at $69.

Buyers found they were paying up to 20% more than purchase prices in taxes. State law set a 12% excise tax on every recreational cannabis purchase (there is no tax on medical cannabis purchases for which doctors' prescriptions are needed), and cities add their own gross receipts taxes.

In Clovis, the gross receipts tax rate is 8.1875%. In Portales, the GRT rate is 8.0625%. Texico's GRT rate is 7.5625%.

Treasury officials representing Clovis, Curry County and Portales, however, expressed disappointment in the tax revenues the new legal cannabis business is adding to city coffers.

Portales City Manager Sarah Austin said she is having doubts about the way the state distributes the 30% share of the excise tax that is supposed to go back to the cities. The amounts returned to the city, she said, are smaller than expected.

Finance Director Marilyn Rapp said adding up the monthly distributions as reported on a state Tax and Revenue Department website from April to September, the latest month for which data was available, resulted in a total of about $66,000.

"This is certainly not the huge revenue boost we expected," she said. The amount of gross receipts tax that the legal cannabis business has brought the city is hard to determine, she said, because "it gets mixed in with the other gross receipts taxes."

She said, however, she has not noted significant increases in gross receipts taxes due to recreational cannabis sales.

The revenue from recreational cannabis, however, may improve, she said, since the state plans to increase the excise tax rate gradually to 18% by July 1, 2030, according to the Cannabis Control Division's website.

Since April, Portales has seen more in medical marijuana sales revenue than in recreational sales. Monthly sales totals since April show Portales saw $1.6 million in medical marijuana sales from April to November, compared with more than $1.1 million in recreational cannabis sales.

Medical marijuana sales have been legal in New Mexico since 2007.

In Clovis, Finance Director LeighAnn Melancon said the city government did not have any expectations about financial impact when legal recreational cannabis sales began in April, but said the city has not seen "the windfall we were led to expect by our Legislature."

Totaling the monthly disbursement from the tax and revenue department to Clovis produces a total of $308,853.

Melancon said that while the amount of gross receipts tax due to cannabis sales is hard to determine, she has seen no windfall increase in GRT since legal recreational cannabis sales began.

"Since it costs about $1 million a mile for streets," she said, "we haven't seen enough tax revenue to do even a mile of street."