We have reviewed the new store, cultivation, and manufacturing licenses issued through Q3 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

• 1,307 new licenses added in Q3 – down very slightly from 1,313 in Q2
• 790 cultivation, 156 manufacturing, and 361 store/dispensary licenses comprise the 1,307
• Total Active licenses are virtually unchanged vs Q2
• Change this year: Stores +8.3%; Manufacturing +4%; Cultivation -11%

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The number of active licenses is down by 3.13% 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. Note this table includes activities beyond stores, cultivation, and manufacturing:

Manufacturing

In Q3 2023 we tracked sixteen states issuing manufacturing licenses. The complexion really changes with the decline in Oklahoma which has accounted for the majority of these licenses for several years.

• 156 new licenses were issued in Q3 compared to 239 in Q2, and 404 in Q1
• New Mexico led Q3 with 51 new licenses while New Jersey was second with 30
• Oklahoma issued only 5 in Q3 compared to 235 in Q1

Cultivation

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 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.

Stores/Dispensaries

Here is our round-up of states that issued dispensary/retailer licenses in the 3rd quarter of 2023. So far this year we added 716 stores in Q1 2023; 471 in Q2 and just 361 in Q3. 5 states accounted for 69% of these Q3 licenses: New Jersey, Michigan, California, New Mexico, and Maine.

Highlights

• New Jersey, Michigan, California, New Mexico, and Maine account for 69% of Q3 licenses.
• Oklahoma issued only 3 licenses, down from 11 in Q2 and 332 in Q1.
• Two Northeast states, New Jersey and Maine, combined for 38% of all Q3 store licenses.

Conclusion

Cannabiz Media has been tracking licenses for almost ten years and 2023 has been just as eventful as the years that have come before with a great deal of volatility in the mix. This year we have seen the following: Stores +8.3%; Manufacturing +4%; Cultivation -11%. It’s important to look below the headlines to see what is driving these changes.

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Moratoria – Currently there are three underway that we know of in Montana, Oregon, and Oklahoma. New ones have been proposed in Vermont to protect local growers, and in Illinois to help in-state distributors. Oklahoma also extended its blanket moratorium out until 2026.
Rule Changes – The number of California cultivators opting for Large licenses went from 2 in Q1 to 40 in Q3. This permits farmers to consolidate their grows under one license instead of having to manage many small ones. This will certainly reduce the license count, but not the facilities that we track.
Crackdowns – Oklahoma has been rigorously enforcing a host of new rules and their regulators are shutting down both legal and illegal grows. Their license count has continued to shrink. Similar rumblings are afoot in Maine where in-depth local reporting by Maine Wire identified hundreds of illegal grows set up with funds from China.

We are well into the fourth quarter and some companies reported slightly better-than-expected earnings. Coupling that with ongoing rumors of rescheduling and safer banking – it is likely to be an interesting and volatile couple of quarters.

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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