We have reviewed the new store, cultivation, and manufacturing licenses issued through midyear in a series of blog posts. In this post we will highlight the overall trends and share details on license growth and contraction in key states.

Key Findings

• 1,313 new licenses added in Q2
• 574 cultivation, 152 manufacturing and 587 store/dispensary licenses comprise the 1,313
• Total Active licenses are virtually unchanged vs Q1
• Change this year: Stores +7.6%; Manufacturing – no change; Cultivation -8%
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The number of active licenses is down by 2.5% since the beginning of the year. The table and graph below show the impact of fewer cultivation licenses being offset by the increase in store/dispensary licenses:

Manufacturing

• In Q2 2023, 14 states issuing manufacturing licenses
• 152 licenses were issued in Q2 compared to 365 in Q1, down 58%
• California led Q2 with 34 licenses; Washington second at 27
• Oklahoma issued 5 in Q2 compared to 235 in Q1 – a 98% decline
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The following graph shows the flattening of new licenses throughout the year. The 98% decline in Oklahoma licenses QoQ was the culprit:

Cultivation

• 574 new cultivation licenses were issued in Q2 versus 630 in Q1 (-9%)
• Oklahoma’s share of all US new cultivation licenses issued was 54% in Q1 and 1.4% in Q2 (-98%)
• 75% of last quarter’s new licenses came from California (27%), Michigan (27%), Vermont (15%)
  & Oregon (7%)

Stores/Dispensaries

• 587 new store/dispensaries licenses were issued in the second quarter
• Oklahoma issued only 11 store licenses in Q2 versus 332 in Q1
• New York minted almost 33% of Q2’s new licenses

The following table shows which states issued store/dispensary licenses by month:

What About Oklahoma?

Oklahoma licensing has been the source of horror and fascination as the state landed at the top of the list in terms of license issuance. However, the Sooner State has made some substantial progress in reining in their own program. The boldest step is the license moratorium that was enacted in September 2022. The effects of this program really took effect in the 2nd quarter of 2023:

• Stores - 11 issued in Q2 versus 332 in Q1
• Cultivation - 8 issued in Q2 versus 338 in Q1
• Manufacturing - 5 issued in Q2 compared to 235 in Q1

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The graph below contrasts the Net Change in Licenses versus the Total Issued. As you can see staring in March, the net change has been negative:

Conclusion

In reviewing the leaderboards above, it is important to keep in mind a few drivers that impact license counts nationwide.

Moratoria – Currently there are three underway that we know of in Montana, Oregon and Oklahoma. These tend to run for several years. To get a license in these states would require M&A.
Rule Changes – The one interesting rule change we have seen is the ability for California cultivators to select a Large license option. This permits farmers to consolidate their grows under one license instead of having to manage many small ones. We found 26 in effect by June 30 and expect more to select this
option when their licenses renew.
Pauses and Fumbles – Cannabis licensing season always coincides with cannabis law suit season. The New York scheme has been held up for a few weeks and some suburban homeowners in Stamford Connecticut have decided there should not be a cannabis program in Connecticut. Finally, Alabama essentially took back, then reissued licenses in their nascent program.

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With all this noise, is it any wonder the industry continues to struggle?

Author

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 multi-jurisdictional 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.

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