Illinois’ adult-use cannabis retailers sold $1.38 billion worth of products in 2021 and set a new record in December, when adult-use sales hit $138 million, according to the Chicago Tribune.

2021’s sales were more than double those in 2020, when Illinois launched its first adult-use sales and logged $669 million in total sales, the news outlet reported.

Illinois’ 110 adult-use dispensaries sold more than 30 million products in 2021, according to the Chicago Tribune.

December’s sales were up 14% from the previous month, according to the news outlet, and broke the previous record of $128 million, which was set in July.

A cannabis company is asking the Illinois Supreme Court to let the state name the winners of craft grower licenses that have been held up by pending litigation, according to the Chicago Tribune.

1837 Craft Grow LLC filed a motion Jan. 5 to modify a court order that bars state officials from naming the licensees until litigation is settled, the news outlet reported.

The case holding up the licensing process centers on 13 companies that sued the state to challenge the licensing process after their applications for craft grow and transporter licenses were disqualified, according to the Chicago Tribune.

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A state law required Illinois officials to issue the 60 new craft grow licenses by Dec. 21, 2021, the news outlet reported, but Cook County Judge Neil Cohen and Sangamon County Judge Gail Noll have ordered that the licenses cannot be awarded until the lawsuit is settled.

A hearing in the case is scheduled for March 10, according to the Chicago Tribune, which also noted that it could take months or years for the litigation to be resolved.

1837 Craft Grow argues in its motion that it and other applicants have faced mounting costs as they pay for property and other business expenses while waiting to hear if they will ultimately be awarded a license to operate.

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The Illinois attorney general’s office asked Noll to allow the state to name the 60 winners of the craft grow licenses without issuing the licenses in an effort to allow the licensees to move forward with their business plans, but Noll denied the request, the Chicago Tribune reported.

Three partners have come together to launch Carver Family Farm, an aspiring adult-use cannabis microbusiness based in Albuquerque, N.M., that plans to bring quality and variety to the state’s forthcoming adult-use cannabis market.

“One of the things I’m excited about is Albuquerque has a huge microbrewery and craft distillery culture here, and I think that craft cannabis is going to be the next big thing for Albuquerque,” Matt Muñoz, the company’s chief innovation and finance officer (CIFO), tells Cannabis Business Times.

Muñoz and the company’s other two partners, Chief Cultivation Officer Andrew Brown and Chief Operations Relations Officer Erika Hartwick Brown, a husband-and-wife team, are seeking to secure multiple adult-use licenses to become a vertically integrated cannabis microbusiness.

The trio applied in August for a producer license, which it received in mid-December. The New Mexico Cannabis Control Division (CCD) opened the application process for retail and manufacturing licenses last month, and Carver Family Farms will apply for those, as well.

Photos by Andrew Brown

“We’re focusing on an organic, no-till, living soil indoor operation,” Muñoz says. “Erika and Andrew have been patients since New Mexico had a medical cannabis program. They’ve been personal producers at their home, so they’ve been growing from there and perfecting this crop ever since.”

Muñoz says cannabis has also been a big part of his life after he was arrested at age 18 on possession charges.

“It took me five years to graduate from high school because of it,” he says. “I lost my scholarships. It’s something that’s been a part of my life since I was young. It’s something that I believe in.”

While Erika and Andrew applied for one of New Mexico’s 34 medical cannabis business licenses nearly a decade ago, they did not ultimately secure a license when the state awarded them through a lottery in 2014.

New Mexico Gov. Michelle Lujan Grisham signed the state’s adult-use cannabis bill into law in April, and the statute sets “a pretty aggressive timeline” for adult-use sales to launch in April 2022, Muñoz says. Regulators have told the Carver Family Farm team members that they should have their final licenses in the next month or two, just in time for the first legal sales.

Building a Business

Carver Family Farm has a facility in Albuquerque where the team plans to co-locate the company’s cultivation, manufacturing and retail operations. Muñoz and the Browns are Albuquerque residents and spent the first few months of their business lives in the city looking for real estate for Carver Family Farm.

“I drove around neighborhoods I didn’t know existed in Albuquerque just looking for warehouses, calling the owners on the tax rolls to see if they wanted to rent it,” Muñoz says. “We were pretty aggressive getting our building.”

While New Mexico’s adult-use cannabis law prohibits the state’s municipalities from outright banning cannabis businesses within their jurisdictions, it does allow them to enact restrictions, such as how far away cannabis operations can be from a school, day care or church.

For example, Muñoz says that Albuquerque banned cannabis stores in its historic district, but several adult-use dispensaries are already planning to set up shop a few blocks outside of that area. Albuquerque also requires cannabis cultivators to have an odor control plan in place, he adds, which prompted Carver Family Farm to purchase carbon filters late in the business planning process in order to comply with the ordinance.

“I know one of the small towns put that you can’t be 300 feet from a residentially zoned area, which basically meant there were two shopping centers in the entire county where you could put a dispensary,” Muñoz says. “They’re still finding creative ways to restrict it, but they can’t just outright ban it.”

Opportunities and Challenges

Muñoz applauds New Mexico for creating microbusiness licenses, which he says “lowered the bar for a lot of smaller producers to enter this market.”

Albuquerque has a culture that supports shopping small and shopping local, Muñoz adds, which will help microbusinesses like Carver Family Farm find a niche market.

“That’s what I’m excited about, is seeing this high-end, craft cannabis that you don’t really see in some of these bigger markets,” he says.

Muñoz points to ever-changing regulations as some of the company’s biggest growing pains.

“They’re not finalized, so it’s like we’re building a business while they’re building the regulations, and that’s our biggest headache,” he says.

Securing additional employees is also a chief concern, Muñoz adds, as the national labor shortage continues.

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“Finding enough workforce to actually bring in the harvests and trim and all of the other labor-intensive parts of this process that we need is a concern for me in the short-term,” he says.

Securing water rights is another challenge for many of New Mexico’s cannabis producers.

“It’s their biggest roadblock besides financing,” Muñoz says.

It’s a complicated issue, he adds, which could ultimately keep larger, multistate operators from dominating the state’s market.

“New Mexico put in statute that you have to have water rights in order to grow, and so it’s not going to be [like] in other parts of the country where you can just build a warehouse and drill a well and suddenly start growing,” Muñoz says.

Water rights are attached to property in the state, he says, and cannabis producers must find farms that have the proper amount of water rights to support their crops.

“We’re fortunate in Albuquerque because we have commercial water [and] we have a commercial lease,” Muñoz says. “For commercial property, if you have a commercial lease, you can use it. But outside of that, finding commercial water in New Mexico is going to be the hardest thing.”

The ongoing COVID-19 pandemic also poses its own unique set of challenges for new businesses, in New Mexico and beyond. The Carver Family Farm team plans to follow all state and Occupational Safety and Health Administration (OSHA) guidelines to keep its employees and customers safe, Muñoz says, and the company will require its employees to be vaccinated and boosted.

“New Mexico changed the definition of fully vaccinated—it’s considered with a booster,” he says. “We’re going to have a mask mandate—everybody is going to have to wear a mask. We’re looking at what happens after Omicron. What’s the next issue? We’re looking at doing the online, web-based market, which became very popular during the pandemic.”

To promote social distancing, the team is considering moving some of its trimmers out of the facility’s designated trim room and into other areas of the building in order to keep employees 6 feet apart while trimming.

Finding a Niche

Product quality and variety will ultimately set Carver Family Farm apart in New Mexico’s nascent adult-use cannabis market, according to Muñoz.

While the company’s organic, no-till cultivation is more labor-intensive, he says it produces higher quality flower, which medical cannabis patients have said is lacking in the state.

“That’s really where we’re going to be distinguishing ourselves, is putting out the highest quality flower that we can,” Muñoz says.

The company has also amassed a wide variety of cultivars over the last 10 years, he adds, with a collection of 169 different genetics.

“We have some strains that are sought after all over, that you just can’t find anywhere close to us,” Muñoz says. “We think that’s also a way for us to distinguish ourselves.”

Flower will be Carver Family Farm’s main focus, as it continues to be the most popular product category among New Mexico’s patients, according to Muñoz. Many of the state’s medical cannabis retailers consistently sell out of their flower offerings, he says.

The company is also paying close attention to the rise of solventless extraction and plans to produce live rosin for New Mexico’s adult-use market.

Carver Family Farm’s main goal, however, is to have product on the shelf when adult-use sales launch April 1, Muñoz says. “Short-term, we just want to have product to sell and have our market ready."

The New Hampshire House approved an adult-use cannabis legalization bill Jan. 6, according to an AP News report, after similar legislation cleared the House in 2020 but ultimately stalled in the Senate.

The bill, which now returns to the Senate for consideration, would allow adults to possess up to three-fourths of an ounce of cannabis and cultivate up to six plants at home, AP News reported.

Cannabis could be traded or given away under the legislation, but not sold, according to the news outlet.

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A broader bill in 2019 would have created a regulated and taxed retail market for adult-use sales, but that legislation also died in the Senate, AP News reported.

While New Hampshire Gov. Chris Sununu opposes adult-use legalization, the latest bill approved by the House passed with five votes more than needed for a veto-proof majority, according to the news outlet.