NEW MEXICO (KRQE) – New Mexico cannabis industry leaders have warned about a boom turning to bust forecasting a likely drop in sales and the closure of smaller pot businesses.Now, one of the state’s largest cannabis businesses is closing a prime space in Santa Fe.

“Sadly, you know, we may have set the bar so low… many of them are experiencing what I’m calling the New Mexico nightmare,” said Duke Rodriguez, CEO of Ultra Health.

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Nearly two years into New Mexico’s recreational cannabis market, Rodriguez thinks that nightmare playing out is the surge of cannabis retailers now facing closure. “When you create a program with no limitations about who, and how difficult it is to get a license, you’ve invited a lot of people to this party,” said Rodriguez.

“The challenges of over saturation are not going away,” he continued.

There are now 1,050 licensed cannabis retailers across the state. The cannabis control division says around 680 license holders or about 65% are reporting sales which means they’re open for business. “The governor’s promise was to have this be an industry open for anybody to participate but I don’t think anybody expected quite this many folks,” said Ben Lewinger, executive director of the NM cannabis chamber of commerce.

A lot of industry leaders have forecasted cannabis retail closures to hit hard in 2024. “I definitely expect more stores to close including small and medium size shops but also some of the bigger operators because it’s so competitive right now,” said Lewinger.

A bigger operation with 40 locations is now closing one shop in Santa Fe as Ultra Health says at the end of the month they’ll shut down their shop on Cerillos one of the busiest roads in the city. “We never like closing locations, but in this case, it was the right decision with over 1,000 licensed dispensaries already in New Mexico,” said Rodriguez.

Rodriguez says high rent and just a few hundred dollars worth of sales per day is what led to the decision. “The sad part is that lots of businesses will close their doors, but again that’s the flip side of the coin of everybody having their shot to participate in this industry,” said Lewinger.