March 27, 2018
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Part 4 of Cannabiz Media’s 5-part series about marijuana licenses in California analyzes the state’s retail and dispensing licenses. If you missed the other parts of the series, you can follow the links to read them now: Part 1: California Overview, Part 2: California Cultivation, Part 3: Manufacturing, and Part 5: Growth and Comparison to Other States.
The Bureau of Cannabis Control is responsible for licensing retailers/dispensaries, distributors, testing laboratories, microbusinesses, and temporary cannabis events in California. The term “dispensary” isn’t used in California to identify medical marijuana dispensaries as other states do. Instead, California differentiates between the adult-use and medical markets by granting “adult retailer” and “medicinal retailer” licenses.Retailer licenses in California are further categorized by the operations the licensed business is involved in:
Not including micro-licenses, there are 815 retail licenses in California with slightly more medicinal retailer licenses (54%) than adult retailer licenses (46%) as shown in the chart below. Note that this does not mean there are 815 licensed retail outlets as some license holders are securing adult and medicinal licenses at the same location.
The 815 retailer licenses can be further broken down by activity as shown in the chart below with 44% of all licenses held by medicinal retailers with storefronts, 37% held by adult retailers with storefronts, 9% held by medicinal delivery-only retailers, and 9% held by adult delivery-only retailers.
Keep in mind, California’s recreational marijuana market is just three months old, so all of these licenses are temporary at this point in time.
Nearly half of all marijuana retailer licenses (49%) are in just three of California’s 58 counties: Los Angeles (28%), Alameda (11%), and San Francisco (10%). Expanding that a bit, more than three out of four retailer licenses (76%) are in eight counties: Los Angeles, Alameda, San Francisco, Sacramento (9%), Riverside (6%), Orange (5%), San Diego (4%), and Santa Cruz (3%).
In terms of license concentration by city, 50% of California’s marijuana retailer licenses are in seven cities: Los Angeles (11%), San Francisco (10%), Oakland (9%), Sacramento (9%), Santa Ana (5%), San Diego (3%), and Cathedral City (2%). In total, retailer licenses can be found in 110 California cities.
The 815 retailer licenses in California are held by 514 license holders. Similar to marijuana manufacturing licenses in California, there are no dominant license holders with 232 license holders having just one license each and 272 having two licenses each.
Only three license holders have three licenses (420 Central, Higher Level, and Stone Age Farmacy) while five have four licenses (East Bay Therapeutics, Hometown Heart, KindPeoples, Monex Place Wellness, Inc., and urbn leaf) and two have five licenses (SPARC and The Apothecarium).
It’s likely there is little concentration in license holders simply because the challenges of complying with regulations in 530+ jurisdictions across the state doesn’t make strategic sense in California’s current marijuana market.
Looking at the large number of retail license holders that have one license each, it’s possible that many of these license holders are legacy dispensaries that want to keep doing what they’ve been doing for years as the state’s market evolves around them.
Part 5 of the Marijuana Licenses in California series is coming to the Cannabiz Media blog next week. It will compare California’s marijuana licenses to other states. If you haven’t already subscribed to the Cannabiz Media newsletter, subscribe now so you don’t miss it.
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