Split Deals and Splitting Hairs: A Producer’s Shortcut, or a Processor’s Headache?
You’re a producer in New Mexico, getting ready to harvest your first crop. You put out feelers to stores, and buyers start firing off questions: What’s the THC%? Got pre-rolls? Any vapes? Rosin? You haven’t even pulled the plants out of the ground, and already it’s clear — people don’t just want flower. They want an assortment. They want your product in every form, in all its glory.
So you go looking for a processing partner. Enter: split deals.
Splits & You
On paper, a split deal looks like the perfect handshake: one side brings the biomass, the other brings the extraction rigs and pre-roll machines, and both walk away with goods they can sell. No cash up front — just a split of the final product.
Sounds good, right? But this is New Mexico. Nothing here is ever that simple.
What a Split Deal Is
A split is strategy, not charity. Producers sitting on warehouses of trim can’t move it all, and processors with idle machines bleed overhead. The split deal is a truce: you bring raw material, I’ll turn it into oil, extracts, or pre-rolls, and we divide the bounty.
The math usually starts at 50/50, but it shifts depending on workload, and what you get back can look very different:
Raw bulk: A mason jar of rosin, a liter of distillate, or a shoebox of 500 packed pre-rolls. Flexible, but still needs processing.
Packaged but unlabeled: Grammed, tubbed, pucked, bagged, sublotted, and finished in inner-packaging, but missing brand and compliance stickers. Cheap to finish, but still labor and materials.
Finished branded goods: Ready to hit a retail shelf. The gold standard — but processors expect more of the pie; or be compensated for packaging which means cash on top of your split.
When It Goes Sideways
Split deals shine until something breaks.
Failed batches: Mold, pesticides, or metals nuke a batch. Somebody has to eat the COA bill. Producers blame processors, processors blame biomass. Everyone’s pissed
Low yields: What looked like fire might only return half the expected oil. Producers feel robbed, processors shrug. “That’s how it runs.”
Packaging errors: Mislabels, underweight rolls, sloppy sublotting — all lead to bad consumer experiences at the register.
Two-Sided Blade
For the producer, getting back turnkey pre-rolls or jars is a dream — they can walk into a shop, drop a case, and sell. No stickers, no pop-ups, no pitch. Done.
For the processor, it’s risk. They’ve invested labor and packaging, betting on the brand’s value — but if the farmer dumps the whole batch to a cash buyer at half price, all that work is devalued overnight.
The Cash Buyer Factor
Finished branded product is dangerously easy to sell. Instead of cold calls and long drives, a producer can flip the entire batch to a buyer for 40–60% of retail value and walk away clean.
Why it works for them:
No chasing 100+ shops across the state.
No driving samples to Hobbs, Farmington, or Ruidoso.
No begging to get on menus.
No Net 30/60/90 headaches.
Fast money beats slow sales. For a farmer, that trade-off often makes sense. For the processor, it’s cannibalization.
The Processor’s Dilemma
Processors watch their own branded SKUs get cheapened:
They elevate a producer’s product into a “brand,” only to see it undersold.
Retailers start associating their packaging with bargain-bin bulk.
Long-term value gets cut at the knees.
Why It Happens in New Mexico
Oversupply + license saturation = desperate producers.
Weak sales infrastructure = owners doing sales out of pickup trucks.
Fast-cash culture = survival mode over brand-building.
The Hard Truth
Split deals aren’t about partnership — they’re about risk. If you’re walking into one, its important to be aware and have realistic expectations:
Who pays for failed batch testing?
What’s the minimum acceptable yield?
Who owns packaging, labeling, and compliance?
Can producers undercut with bulk dumps, or is there a floor?
Without answers, a split deal is a coin flip. One side wins, the other side…
The Takeaway
This isn’t for the faint of heart. Producers want to farm, processors want to process — but nobody wants to be stuck looking for sales, and that’s where the real money is.
So when someone offers you a split deal, ask yourself: Are you building a brand, or just flipping weight?
