Following up on our recent review of dispensaries and retailers, we now delve into cultivation licenses. These “census” snapshots, derived from our Cannabiz Business Intelligence Platform, highlight where new licenses are being issued.  

Key Findings

1. Total cultivation licenses are down over 3,000 (-13%) from one year ago
2. Regulators issued 790 new cultivation licenses in Q3 versus 635 in Q2 (+24%)
3. 91% of Q3’s new licenses came from five states:  Michigan (57%), California (16.7%),  Vermont (9.5%) New Jersey (6%), and Mississippi (2%)

The following table is the quarter-end and YTD snapshot of new cultivation licenses added by month:

The following graph shows total active cultivation licenses. Total licenses are down 13% nationwide, despite all the new ones outlined in the table above. Note the Y-axis scale.

Another illuminating view into these changes is looking at the net change by state for the same period:

It is important to note that not all those negative numbers mean gloom and doom. In the case of California, there are about 40 farms that have taken advantage of the Large Indoor and Large Outdoor licenses which are respectively 22,000 square feet and greater than 1 acre respectively. By the end of Q2, there were 26 issued which results in the conversion of smaller licenses. Only two had been issued in Q1.  

Starting on August 26, 2022, and continuing at least through August 26, 2024, Oklahoma stopped accepting new grower, processor, and dispensary licenses.  At the same time, there has been a substantial crackdown on illegal licenses in the state which were fraudulently obtained.  It is likely that these efforts will continue and that the license counts will drop further.

Conclusion

As we see every quarter, the vast majority of cultivation licenses are issued in a few states. The held in Q3 as Michigan, California, Vermont, New Jersey, and Mississippi accounting for 91% of new cultivation licenses.  In some states, these new licenses contribute to an oversupply that feeds the black market. Additional capacity drives down the price in many markets.  On the positive side, overall licenses are down nationwide as a result of some cultivators not renewing or shrinking their canopy; license moratoria, and fewer new licenses issued in some jurisdictions.  

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 Market Intelligence Program yourself to dive further into this data.

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.

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.