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February 26, 2025
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The seed to sale value chain starts with plants in the ground and many observers and analysts track this license to gauge how the supply and price of cannabis will move. In 2024, new licenses were up over 2023 but 63% of those new licenses came from just Michigan and Oklahoma. The tally of 3,369 new licenses is well off the peak of 9,010 in 2021.
Given the moratoriums, oversupply, and pricing pressure, adding cultivation licenses in mature markets does not seem wise. In the graph below we show the number of licenses added each month. The summer spikes seemed to be boosted by the Michigan adding 689 cultivation licenses in the 2nd quarter. 498 of these came from just 10 farms.
Here is the 2024 Cultivation Leaderboard for New Licenses with Michigan taking the crown.
In looking over past years, we are way down from the dizzying heights of 2021 where 9,010 cultivation licenses were issued. 2024 was a bounce-back from a low of 2,253 in 2023.
And here’s the top 10 states in terms of total active cultivation licenses:
We’ve learned a lot in documenting cultivation licenses in the last decade. Recently the local press in California decried the ratio of inactive to active licenses in the state. Readers of this blog know that California allowed farmers to consolidate Small licenses into Large ones. Currently there are 63 of these large licenses, thus driving the license count down, but not necessarily the number of farms. Details matter. As we pointed out above, 10 Michigan cultivator added 498 licenses in the summer of 2024. That’s almost 15% of the year’s new grow licenses for the country. This surge does not necessarily mean that Michigan’s canopy is going to increase, or that there is even a surge of demand. License counts are only one proxy for the industry – we think the number of facilities is a much better metric.
The oversupply is crushing for this industry. Michigan’s Mlive just wrote that “wholesale prices for a pound of marijuana that previously fetched $1,500 struggled to find buyers at $150 per pound after enormous outdoor harvests flooded the market in October”. These races to the bottom will not sustain this industry.
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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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.
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