Cannacurio #79: Cultivation 2023 Q2 Ranking

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Following our recent dispensary and retailer review, we now look at cultivation licenses. Derived from our Cannabiz Business Intelligence platform, these “census” snapshots show where new licenses are being created. The second quarter saw 9% fewer cultivation licenses issued than in the first quarter, and Oklahoma’s numbers fell sharply when the moratorium went into effect.

1. The total number of cultivation licenses decreased by 2,494 (10.7%) compared to the previous year
2. Regulators issued 574 new Cultivation licenses in Q2 vs. 630 in Q1 (-9%)
3. Oklahoma’s share of all newly granted US cultivation licenses was 54% in the first quarter and 1.4% in the second quarter (-98%).
4. Four states accounted for 75% of new licenses last quarter: California (27%), Michigan (27%), Vermont (15%) and Oregon (7%).

The table below shows the quarter-end and YTD snapshot of new cultivation licenses added by month:

The chart below shows the amount of new planting over the past two years. The trend is evident, although there are still thousands of existing licenses that can be renewed year after year.

Regulatory Changes

In our year-end Cultivation Leaderboard Report, we highlighted some regulatory policies impacting cultivation licenses. The flood of legal licenses and legacy market dynamics have lowered the price of cannabis to the detriment of many licensees.

• California: Effective January 1, 2023, the California Department of Cannabis Control was able to issue Large Indoor and Large Outdoor licenses covering 22,000 square feet and more than 1 acre respectively – it looks like 26 of those have been issued, leading to cancellation of these licenses carries smaller licenses. Only two were issued in the first quarter. Here is the list by county:

• Oklahoma: Beginning August 26, 2022 and through August 26, 2024, Oklahoma will no longer accept new licenses for growers, processors, and dispensaries. It appears the state has caught up on the backlog as it only issued 8 in Q2 versus 338 in Q1.

The following graphic and table shows this in total Number of cultivation licenses we track. The nationwide total is down 2,494 (10.7%) from last year.

Diploma

As we saw at the end of the first quarter, the vast majority of cultivation licenses are issued in a few states. California, Oklahoma, Michigan, Oregon and Colorado account for 82%. This oversupply continues to fuel the black market, which finds its way into states with and without cannabis programs. It will continue to lead to a price spiral downwards in many markets.

On the bright side, nationwide the total number of licenses has declined because some growers are not renovating or downsizing their canopies; Licensing moratoria and fewer new licenses are issued in some jurisdictions. We will review these licenses and their development in October.

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 straight to your inbox. Or you can schedule a demo to learn more about how to access and dig deeper into the Cannabiz media license database yourself.

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 on compliance issues. Ed has managed product, marketing and sales while overseeing complex, multi-country product lines in the securities, corporate, UCC, safety, environmental and human resources sectors.

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 Northwestern University’s Kellogg School.

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