Cannacurio # 45: Manufacturing Licenses January – May 2021
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Manufacturing licenses are a part of the cannabis value chain that doesn’t get as much attention as agriculture and retail. They are not issued with the same frequency – nor with the same intensity – as cultivation and retail / pharmacy licenses.
However, they serve as important assets for companies as the products are often strong brands. These brands, unlike licensed items, can cross state boundaries and will no doubt help established companies thrive and build market share.
We closed 2020 with 4,393 active manufacturing licenses. So far this year, states have added 488 more, but we estimate 4,798 with no renewals.
background
We categorize a license as a manufacturer if it matches the following description: The license is for the processing (manufacture) of marijuana-enriched products such as edibles or concentrates, but does not include cultivation or retail sales to customers (flower in, product out) .
States rarely agree on these licenses. In some jurisdictions, the cultivation and manufacturing activities can be combined into a single license, such as in Connecticut and New Mexico. In other jurisdictions, such as Florida and New York, the license holder is required to conduct all cultivation, manufacture and sale with his license. Georgia and Alabama are also following this oligopolistic path.
Leaderboard
Here is the ranking comparing the end of 2020 and May 2021. The% column shows what percentage each state accounts for in the total of the country. The growth shows the change at the beginning of the year.
As usual, the leaderboard is highly concentrated with five states making up 88% of the licenses.
Most important findings
- Active licenses are up 9.2% since the beginning of the year.
- 43% of the new licenses were in Oklahoma.
- Michigan and Massachusetts continue to achieve strong results as their programs continue to grow.
- Few companies received multiple licenses, and it did so mainly in Michigan and Colorado, where licensees were looking for medical and adult licenses.
Conclusion
Some consider manufacturing to be one of the sweet spots in the cannabis value chain. You’re not facing the challenges of farming or commodification, nor do you have to deal with the thin margins in retail space.
Manufacturers have the best chance of building a brand, and that makes it an attractive part of the value chain for transplanted talent from spirits, packaged goods, and pharmaceuticals because it looks familiar.
Ed Keating is the co-founder of Cannabiz Media and oversees the company’s data research and government relations. He has spent his career working with and advising information companies on compliance issues. Ed has led product, marketing, and sales while overseeing complex multi-jurisdictional 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 keep track of the people, products, and companies in the cannabis industry.
Ed graduated from Hamilton College and received his MBA from Northwestern University’s Kellogg School.
Cannabiz Media customers can keep up to date on these and other new licenses through our newsletter, warning and reporting modules. Subscribe to our newsletter to receive these weekly reports in your inbox. Or you can schedule a demo for more information on how you can access the Cannabiz media license database yourself to examine this data in more detail.
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