Cannacurio #79: Cultivation 2023 Q2 Leaderboard

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 show where new licenses are being created. 9% fewer cultivation licenses were issued in Q2 versus Q1 and Oklahoma’s numbers dropped drastically as the moratorium took effect.  

Key Findings

1. Total cultivation licenses are down 2,494 (10.7%) from one year ago
2. Regulators issued 574 new cultivation licenses in Q2 versus 630 in Q1 (-9%)
3. Oklahoma’s share of all US new cultivation licenses issued was 54% in Q1 and 1.4% in Q2 (-98%)
4. 75% of last quarter’s new licenses came from four states: California (27%), Michigan (27%), Vermont (15%) & Oregon (7%)

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

The following graph shows the quantity of new cultivation issued over the last two years. The trend is obvious, though there are still thousands of existing licenses that are managing to renew year after year.

Regulatory Changes

In our year-end Cultivation Leaderboard Report, we highlighted some regulatory policies that were having an impact on cultivation licenses. The flood of legal licenses along with the vigor of the legacy market have been driving the price of cannabis down, to the detriment of many license holders.

• California: Effective January 1, 2023 the California Department of Cannabis Control was able to issue Large Indoor and Large Outdoor licenses which are respectively 22,000 square feet and greater than 1 acre respectively – it looks like 26 of those have been issued which results in the cancellation of those smaller licenses. Only two had been issued in Q1. Here’s the list by county:

• Oklahoma: Starting on August 26, 2022 and continuing through August 26, 2024, Oklahoma stopped accepting new grower, processor and dispensary licenses. It appears that the state worked through the backlog as they only issued 8 in Q2, down from 338 in Q1.

The graph and table below shows the total number of cultivation licenses we are tracking. The nationwide total is down 2,494 (10.7%) from one year ago.

Conclusion

Just as we saw at the end of Q1, the vast majority of cultivation licenses are issued in a few states. California, Oklahoma, Michigan, Oregon and Colorado account for 82%. This oversupply continues to feed into the black market that makes its way to states with and without cannabis programs. It will continue to drive downward price spirals 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. We will revisit these licenses and their trajectory again in October.

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.

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.