Cannacurio 118: License review Q3 2025

The third quarter of 2025 highlighted the cannabis industry's resilience in the face of ongoing regulatory uncertainty. Despite ongoing speculation about federal re-planning—including renewed attention from policymakers and public advocacy groups—no significant policy changes occurred. Nevertheless, the market continued to evolve at the state level, with active licenses declining slightly as operators recalibrated their strategies in response to oversupply, pricing pressure and increasing competition.

Key findings

• The number of active cannabis licenses fell slightly to 38,364 from 39,047 in the second quarter of 2025.
• There were 1,256 new licenses issued across all activities in the third quarter of 2025, a decrease (11%) from 1,417 in the second quarter of 2025.
• 28 states issued at least one license this quarter.

Cultivation, manufacturing and storage licenses accounted for 90% of cannabis licenses issued. The following graphic compares the ratio between the second and third quarters of 2025.

• The share of cultivation licenses increased from 46% to 56% of the total.
• Business fell 35% from 32%.
• Manufacturing fell from 19% to 13%.

Looking back over the last 12 months, cultivation was the most volatile category for new licenses, seeing an increase in April as 210 new farmer licenses were issued in Michigan.

Here is the national leaderboard for the third quarter of 2025, with California at the top. This table contains all licensed activities:

Activities

While there are many types of licenses in the cannabis ecosystem, cultivation, manufacturing and business make up about 90% of the licenses issued – and they are generally licensed in all jurisdictions. The following section addresses these activities for the third quarter of 2025. Oklahoma is excluded from the following analysis.

Cultivation

All year long we have seen states suffer from low prices due to oversupply. However, 518 additional cultivation licenses were issued in the quarter, most of them from California.

Important insights into cultivation

• In the third quarter, 518 cultivation licenses were issued; significantly below the value of 729 in the second quarter.
• California spent 190 (37%).
• Michigan issued 146 new cultivation licenses, with Maine a distant third with 51.
• There are 17,652 active cultivation licenses nationwide, up from 18,164 at the end of the second quarter.

The chart below shows new cultivation licenses issued in 2025. The numbers are consistent, with the exception of April, when Michigan issued 210 new licenses.

Here are the cultivation rankings for the third quarter of 2025:

Manufacturing

As usual, manufacturing licenses were the smallest category in terms of granting new licenses. In the third quarter, 170 new licenses were issued in 17 states. This is a % decrease from 218 in the second quarter. The chart below shows that only 3 to 8 dozen of these licenses are issued per month.

Important insights from manufacturing

• There were 170 new manufacturing licenses granted in the third quarter of 2025, compared to 218 in the second quarter.
• New York topped the rankings with 48 points, followed by New Mexico in second place with 38 points.
• Seventeen states issued licenses for this activity in the third quarter, up from 16 in the second quarter.

Pharmacy/Retail

Store openings still generate news and press releases. As licenses that primarily affect customers, they arouse the greatest interest. In some states, they also face strong competition from the illegal market as well as smoke, vape and CBD shops. The chart below and the trend line show a slight uptick in new licenses across the country.

Save important insights

• 24 states added stores in the third quarter, compared to 28 in the second quarter.
• There were 414 new store licenses issued in the third quarter, compared to 420 in the second quarter.
• There are 13,392 active licenses, unchanged from 13,198 at the end of the second quarter.
• 180 Oklahoma stores have gone offline since Jan. 1.

New York has maintained its leading position in the Store Leaderboard since the fourth quarter of 2024; and accounted for nearly twenty percent of all new store licenses issued nationwide in the third quarter.

Diploma

As we near the end of the third quarter of 2025, the cannabis industry continues to operate in a landscape characterized by regulatory uncertainty and changing market dynamics. While federal debt restructuring remains stalled, state-level activity underscores the industry's resilience and adaptability. This quarter's licensing data shows a measured pace of growth – with cultivation remaining the most active category – even as oversupply and pricing pressures remain.

The slight decline in active licenses and the concentration of new activity in a few key states suggests that consolidation and strategic expansion will determine the next phase of market development. Operators and investors alike should keep an eye on states like Minnesota, Kentucky, Nebraska and Delaware, where new regulatory frameworks could provide new opportunities in 2026.

Looking ahead to the fourth quarter, we expect licensing activity to continue at a steady pace, with retail expansion and vertical integration shaping competitive strategies. In our next Cannacurio post, we will examine how 2025 ended and what signals we see for the broader market heading into 2026.

author

Ed Keating is co-founder of Cannabiz Media and oversees the company's data research and government relations. Throughout his career, he has worked with and advised information companies in the compliance area. Ed has led product, marketing and sales while overseeing complex, multi-country product lines in the securities, corporate, UCC, security, environmental and human resources markets.

At Cannabiz Media, Ed enjoys the challenge of working with regulators around the world as he and his team collect corporate, financial and licensing information to track the people, products and companies in the cannabis economy.

Ed graduated from Hamilton College and received his MBA from the Kellogg School of Northwestern University.

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