Following up on our recent review of dispensaries and retailers, we now delve into the Q1 2024 cultivation licenses. These “census” snapshots derived from our Cannabiz Business Intelligence platform show where new licenses are being created. As a result of moratoriums and market pressures, the rate of adding new cultivation licenses is down in most jurisdictions.

Key Findings

1. Regulators issued only 289 cultivation licenses in Q1, slightly higher than Q42023’s 277
2. California, Michigan, and New Jersey accounted for 66% of the new cultivation licenses
3. Total cultivation licenses in Oklahoma dropped by 660 over the quarter– a 14% decline
4. Several large growing states have license moratoriums in place

The following table is the quarter-end snapshot of new cultivation licenses added by month this year for the top 5 states. California and Michigan have been at the top of this leaderboard, along with Oklahoma for years. The complete list of issuing states is available on our Cannabis Market Intelligence Platform www.cannabiz.media.

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The following table compares the quantity of new cultivation licenses in the first quarter over the last four years. Moratoriums in Oregon and Oklahoma have certainly driven this trend – as well as the general oversupply in many markets.

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Key Markets

California

In addition to tracking licenses, Cannabiz Media also tracks facilities, which we define as a business with multiple licenses at one location. This can help to better size sales and marketing opportunities because sixty or more licenses may be held by one business in California. The graph below shows the relationship between licenses and facilities over the last 12 months. The line graph depicts the average licenses per facility which has declined from 1.96 to 1.7 over that time. Some of this drop could be attributed to the Large Indoor and Large Outdoor licenses which have been issued in the last fifteen months. It appears that only five have been added in the quarter, but they can be used to roll up many small licenses.

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Oklahoma

The story in OK has been well documented in this blog. Between the license moratorium and increased enforcement – the trend continued to be downward.

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Conclusion

The leaderboard below shows the top 5 states total and the number of cultivation licenses we are tracking. The nationwide total is down 888 (-4.3%) from year-end 2023. The complete list of issuing states is available on our Cannabis Market Intelligence Platform www.cannabiz.media.

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The vast majority of cultivation licenses are still centered in a handful of states. California, Oklahoma, Michigan, Oregon, and Washington account for 77%. This oversupply continues to feed into the unlicensed market that makes its way to states with and without cannabis programs. Regulators are trying to address these oversupply issues:

• Vermont’s Cannabis Control Board indefinitely closed the acceptance period for applications for all types of Tier 3 cultivation licenses and mixed Tier 2 licenses effective midnight April 1.
• The California Department of Cannabis Control (DCC) published some new guidelines for cannabis cultivators following the passage of SB-833. Among other things, California will let cannabis cultivators reduce their canopy size and thereby reduce license costs.
• Moratoria exists in Oklahoma through 2026 and in Oregon indefinitely.

Stay tuned to see if other states will follow these approaches or come up with different schemes to combat oversupply.

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 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.