The fourth quarter of 2018 was notable as states like Connecticut doubled their dispensaries from nine to 18 while Oklahoma went on a spree issuing 162 caregiver, 805 dispensary, 1,302 grower, and 341 processor licenses by year end.

However, all this pales in comparison to California, which issued 6,855 new licenses between November 1, 2018 and year end. The regulators talked throughout the fall that their staff was going to be working nights and weekends to process the last of the temporary licenses, and it appears they were true to their word.

Key Facts about California Cannabis Licenses

  • California has 10,940 active licenses, though only a few dozen are annual licenses. This count does not include 149 event licenses.
  • As of October 31, 2018, there were approximately 4,085 active licenses, including 257 issued in late 2017. Over the next two months California more than doubled that count by issuing 6,855 more.
  • The California Department of Agriculture issued the vast majority of these new licenses: 65%.
  • 45 license holders garnered double digit licenses during this period and accounted for 1,665 of the 6,855 (24%).

california cannabis licenses by month of issuance chart

Multiple Licenses

As we have documented over the last 13 months, cultivators are stacking licenses to create large cultivation facilities. You can see the top five companies that received licenses during the last 60 days in the table below.

california cannabis license recipients nov-dec 2018 table

Regulators

There are three regulators in California and each is responsible for different parts of the value chain:

  • California Department of Food & Agriculture (DOFA) regulates cultivators and has issued the most licenses.
  • Bureau of Cannabis Control (BCC) regulates retailers, testing labs, distributors, microbusinesses, and delivery. It authorized almost a quarter of the licenses.
  • California Department of Public Health (CDPH) issued 12% of the licenses to manufacturers.

california cannabis license issuance by regulator chart

Activities

The chart below provides a deeper dive into the licensed activities.

california cannabis licenses by activity nov-dec 2018 chart

In comparing licenses issued by activity, many categories almost doubled like distributor at 198%, manufacturer at 188%, and cultivator at 178%. Retailers only increased by 58% and testing labs by 68%.

california cannabis license issuance by activity chart

License Types

The state of California has a myriad of licenses that it offers to cannabis businesses. The licenses of choice during the recent issuance were for cultivation and manufacturing. The top 10 are shown in the table below.

top 10 types of california cannabis licenses issued nov-dec 2018 table

Compared to the first 10 months, the list is similar except that the Small Outdoor licenses accounted for 21.4% of the new licenses up from 17.5% of licenses issued in the first 10 months of the year.

california cannabis top 10 license types chart

Since California ceased issuing temporary licenses, the license onslaught has ebbed. We will monitor the disposition of these licenses as they migrate to become provisional and annual licenses. There are some expiration date peaks on the horizon that will confront regulators and license holders as shown in the chart below.

active california cannabis licenses expiration dates chart

Looking Ahead to California Cannabis Licenses in 2019

With a year of regulation complete and the newly approved state regulations for cannabis businesses, California and its license holders should experience a more stable year.

This year will come with challenges as license holders work on their annual licenses, connect to track and trace, and pay application fees and of course, taxes.