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New Mexico increased its cigarette tax rate by $0.34 per pack in 2020 and saw its smuggling rate increase by 6.3 percent, moving it two ranks higher and giving it the third-highest smuggling rate in the country, with smuggled cigarettes accounting for 43.46 percent of the total cigarette market

This is known as the in-bond system. The United States Government Accountability Office produced in 2017 a lengthy report of illicit cigarette trafficking at the border and zeroed in on duty-free and bonded warehouses as sources of traffic.[34] Eighty-eight such stores and warehouses dotted the Southwestern border across Texas, California, Arizona and New Mexico.[35] Federal agencies had long recognized that duty-free stores along or near the border may be a source of legal purchases that may get illegally diverted to avoid duty and tax payments.[*] Duty-free stores in Texas were the dominant sellers of cigarettes

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Retailers regularly sell THCa-rich hemp flowers and extracts as legal hemp items throughout the state