Cannacurio: Manufacturing Leaderboard (Q1 2020)

One part of the Cannabis value chain that we have not covered this year is Manufacturing. We ended 2019 with 4,804 active licenses. So far this year states have added 178 more or 3.7%.

Background

We categorize a license as a manufacturer if it fits the following description: License is for the processing (manufacturing) of marijuana-infused products, such as edibles or concentrates, but does not include cultivation or retail sale to customers (flower in, product out). States are rarely in harmony when it comes to these licenses. Here’s a sampling of different manufacturing license descriptions currently in use across the US:

1. Producer
2. Marijuana Processor
3. Registered Dispensary
4. Recreational Processor
5. Registered Processing Site
6. Medical Marijuana Processor
7. Infused Product Manufacturer
8. Retail Marijuana Products Mfg
9. Grower/Processor Applicant
10. Grower/Processor Clinical Registrant
11. Grower/Processor Permittee
12. Marijuana Product Manufacturing Facility
13. Marijuana Concentrate Manufacturing Facility
14. Marijuana Processor Marijuana Transportation
15. Marijuana Producer Tier 1 Marijuana Processor
16. Marijuana Producer Tier 2 Marijuana Processor
17. Marijuana Producer Tier 3 Marijuana Processor
18. Marijuana Producer Tier 1 Marijuana Processor Marijuana Transportation
19. Marijuana Producer Tier 2 Marijuana Processor Marijuana Transportation
20. Marijuana Producer Tier 3 Marijuana Processor Marijuana Transportation

In some states the cultivation and manufacturing activities may be combined into a single license like in Connecticut and New Mexico. In other jurisdictions like Florida and New York the license holder is required to do all grow, manufacture and sell with their license. California issues a plethora of licenses from the Department of Public Health’s Cannabis Safety Branch that includes:

• Type 7 – for extraction using a volatile solvent (ex: butane, propane and hexane)
• Type 6 – for extraction using a mechanical method or non-volatile solvent (ex: CO2, ethanol, water, or food-grade dry ice, cooking oils or butter)
• Type N – for infusions
• Type S - for shared-use manufacturing facilities. This license type is for businesses and facility owners that alternate use of a single manufacturing premises.

Leaderboards

Coming into this year the leaderboard of the top 10 states looked like this:

In Q1 2020 – Michigan has moved into third position for another portion of the cannabis value chain. Here are the states that added licenses in the first quarter:

Key Findings

• Active licenses are up 3.78% since the beginning of the year with 178 added
• Only 12 states added new cultivation licenses in the first quarter
• 96% of the new licenses were in California and Oklahoma

Conclusion

Some consider manufacturing to be one of the sweet spots in the cannabis value chain. You are not subject to the challenges of agriculture or commoditization nor do you have to deal with the thin margins in the retail space. Manufacturers have the best opportunity to build a brand and this makes it an attractive part of the value chain for transplanted talent from liquor, packaged goods and pharmaceuticals because it seems familiar.

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.

‍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.