The New Mexico Department of Health is under pressure to increase purchase limits for medicinal marijuana patients and permit discounts on larger transactions.

Under the state’s Medical Cannabis Program, patients are not permitted to obtain more than 8 ounces of pharmaceutical-grade marijuana over a 90-day period. Albuquerque-based retailer Ultra Health said this “poorly managed regulated system” has handed the initiative to the black market in the Land of Enchantment and called for change.

Ultra Health has 23 dispensaries spread across New Mexico and it is the state’s largest cannabis retailer, with revenues of $4.7 million in the first quarter of 2019, while its wholesale arm brought in a further $1 million. It is piling pressure on the Department of Health to overhaul its medical cannabis regulations.

It comes after the New Mexico Medical Cannabis Program revealed that patient revenues from the first quarter of 2019 reached $28 million, a 16% increase over the same period in 2018. However, patient enrolment increased by 39%, more than double the growth rate of sales. Ultra Health crunched the numbers and deduced that patient sales are lagging the furthest behind patient enrolment in the program’s 11-year history.

“The new administration has an incredible duty and responsibility to rectify the program’s inefficiencies, as dysfunctions of the regulated system will only be exacerbated with the legalization of cannabis for adult use,” said Duke Rodriguez, chief executive and president at Ultra Health.

Gov. Michelle Lujan Grisham, who took office on Nov. 6, 2018, signed Senate Bill 406 into law last month. It expanded the number of conditions that will qualify patients in New Mexico to receive medicinal cannabis, and it also provided more safeguards for employees.

That should boost growth in the state’s marijuana industry, but Rodriguez said more needs to be done to make licensed retailers more competitive with the illicit market. Increasing the purchase limits, permitting discounts and striving to fix the prominent and widening gap between patient demand and adequate supply would be important steps in the right direction, according to Ultra Health.

Department of Health Secretary Kathyleen Kunkel has suggested that it will address the low purchase limit regulations after taking on board feedback from patients and producers in the state.