Cannacurio #72: 2023 Q1 Cultivation Leaderboards

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Following our recent dispensary and retailer review, we now look at cultivation licenses. These “census” snapshots, sourced from our Cannabiz Business Intelligence platform, show where new licenses are being created. As a result of moratoriums and market pressures, the rate of new cultivation license additions has been declining in most jurisdictions.

Important Findings

1. Regulators issued only 42% as many licenses in the first quarter of 2023 as they did in the first quarter of 2022.
2. Oklahoma’s share of all newly issued U.S. cultivation licenses was 67% in January, 46% in February, and 20% in March as the moratorium goes into effect.
3. 76% of new licenses last quarter came from three states: Oklahoma (54%), Michigan (12%), and California (10%).

The table below is a quarter-end snapshot of new cultivation licenses added this year by month. Oklahoma’s January issue accounted for 36% of all licenses issued statewide for the quarter!

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The table below compares the volume of new cultivation licenses in the first quarter of the last three years. The trend is evident, although there are still thousands of existing licenses that manage to renew year after year. It is doubtful that the supply glut will not end so quickly.

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Looking at the monthly issuance over the last 27 months, there has definitely been a downtrend – except for a spike in Oklahoma in September 2023:

Regulatory Changes

In our year-end Cultivation Leaderboard Report, we highlighted some regulatory policies that have impacted cultivation licenses. The flood of legal licenses combined with the dynamics of the legacy market has pushed the price of cannabis down to the detriment of many licensees.

• California: Effective January 1, 2023, the California Department of Cannabis Control may issue licenses for large indoor spaces and large outdoor spaces that are 22,000 square feet or more than 1 acre. Only two of these have been issued so far, which would affect around 40 licenses in total
• Oklahoma: As of August 26, 2022 and through August 26, 2024, Oklahoma stopped accepting new grower, processing, and dispensing licenses. It seems the state had a huge backlog to clear as it continued to issue new licenses. OBNDD, the second cannabis regulatory body, estimates that several thousand cultivation licenses are illegitimate and could eventually fall out of line.
• Oregon: The state is still operating under a new license moratorium from January 1, 2022 to March 31, 2024.

The table below shows the in total Number of cultivation licenses we track. The statewide total is down 1,073 (-4.7%) from year-end 2022, while California is down 894 (-11.6%):

Diploma

The vast majority of cultivation licenses are still concentrated in a handful of states. California, Oklahoma, Michigan, Oregon, and Colorado account for 82%. This oversupply continues to feed the black market, which finds its way into states with and without cannabis programs. It will continue to drive the price spiral downwards in many markets.

Cannabiz Media customers can stay up to date on these and other new licenses through our newsletter, notification and reporting modules. Subscribe to our newsletter to get these weekly reports in your inbox. Or you can schedule a demo to learn more about how to access the Cannabiz media license database yourself to dig deeper into this data.

author

Ed Keating is co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. 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 gather 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 at Northwestern University.

Cannacurio is a weekly column from Cannabiz Media featuring insights from the most comprehensive licensing data platform. Check out Cannacurio’s posts and podcasts for the latest updates and information.