Subscribe to our newsletter to get alerts about new posts, local news, and industry insights.
We categorize a license as a manufacturer if it fits the following description: The license is for the processing (manufacturing) of marijuana-infused products, such as edibles or concentrates, but does not include cultivation or retail sale to customers (flower in, product out).
Cannabis manufacturing licenses are issued at a slower pace than cultivation or retail licenses. However, they serve as important assets for companies because the products are often powerful brands.
These brands, unlike license assets, can cross state lines and will undoubtedly help well-established companies thrive and build market share. They are also useful for the license holder, as these facilities can be used for white label production – therefore, expanding the value of the asset.
It is difficult to estimate the exact amount of white label manufacturing that is done by cannabis companies, as this information is not widely reported or tracked. However, many cannabis companies do offer white label manufacturing services, where they produce and package products for other companies to sell under their own brand. This can include a variety of products such as edibles, topicals, and concentrates.
The use of white label manufacturing allows smaller companies to enter the market and establish a brand, while also providing a way for established companies to expand their product lines.
As we see with other activities, most new licenses were issued by a handful of states. Five states issued 85% of all the new licenses: Oklahoma, California, New Mexico, Michigan, and Washington. The following graph shows states that issued at least 10 new manufacturing licenses last year. The table displays all states.
Below is the Leaderboard comparing Year End 2020, 2021, and 2022. One interesting point is that Oklahoma issued all those new licenses, yet the total number of active licenses actually declined. Lots of churn!
Some consider manufacturing to be one of the sweet spots in the cannabis value chain. You are shielded from the agricultural commoditization, though there are challenges with slotting fees and other placement issues.
Manufacturers have an opportunity to build a brand. This makes it an attractive part of the value chain for transplanted talent from liquor, packaged goods, and pharmaceuticals because it seems familiar.
Manufacturers are also starting to use their marketing resources to interact with customers directly. This long play can build customer loyalty and make inroads for when consumers will be able to buy their favorite brand in many states.
Ed Keating is a co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. He has spent his career working with and advising information companies in the compliance space. Ed has managed product, marketing, and sales while overseeing complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental, and human resource markets.
At Cannabiz Media, Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products, and businesses in the cannabis economy.
Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.
Cannabiz Media customers can stay up-to-date on these and other new licenses through our newsletters, alerts, and reports modules. Subscribe to our newsletter to receive these weekly reports delivered to your inbox. Or you can schedule a demo for more information on how to access the Cannabiz Media License Database yourself to dive further into this data.
Cannacurio is a weekly column from Cannabiz Media featuring insights from the most comprehensive license data platform. Catch up on Cannacurio posts and podcasts for the latest updates and intel.