Cannacurio #81: 2023 Semi-Annual Licensing Summary

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In a series of blog posts, we discussed the new store, grow, and manufacturing licenses granted up to mid-year. In this post, we will highlight the overall trends and share details on license growth and decline across major states.

Key Findings

• 1,313 new licenses were added in the second quarter
• The 1,313 licenses include 574 cultivation, 152 production and 587 shop/dispensary licenses
• The total number of active licenses is virtually unchanged compared to the first quarter
• Change this year: shops +7.6%; Manufacturing – no change; Cultivation -8%
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The number of active licenses is down 2.5% year-to-date. The table and graph below shows the impact of fewer cultivation licenses offset by the increase in store/dispensary licenses:

manufacturing

• In the second quarter of 2023, 14 states will issue manufacturing licenses
• In the second quarter, 152 licenses were issued compared to 365 in the first quarter, a decrease of 58%.
• California led the second quarter with 34 licenses; Washington second with 27
• Oklahoma spent 5 in Q2 compared to 235 in Q1 — a 98% decrease
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The chart below shows the flattening of new licenses over the course of the year. The 98% quarter-over-quarter decline in Oklahoma licenses was the culprit:

cultivation

• In the second quarter, 574 new cultivation licenses were granted compared to 630 in the first quarter (-9%).
• Oklahoma’s share of all newly granted US cultivation licenses was 54% in the first quarter and 1.4% in the second quarter (-98%).
• 75% of new licenses in the last quarter came from California (27%), Michigan (27%), Vermont (15%).
  & Oregon (7%)

shops/pharmacies

• In the second quarter, 587 new branch/pharmacy licenses were issued
• Oklahoma granted only 11 store licenses in the second quarter versus 332 in the first quarter
• New York coined nearly 33% of new licenses in the second quarter

The table below shows which states have granted branch/dispensary licenses by month:

What about Oklahoma?

Licensing in Oklahoma has caused both horror and intrigue as the state has been at the top of the list for licensing. However, the Sooner State has made significant progress in containing its own program. The boldest step is the licensing moratorium that came into effect in September 2022. The effects of this program only became apparent in the second quarter of 2023:

• stores – 11 issued in the second quarter versus 332 in the first quarter
• cultivation – 8 issued in Q2 versus 338 in Q1
• manufacturing – 5 issued in Q2 compared to 235 in Q1

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The chart below compares the net change in licenses to the total number of licenses issued. As you can see in March, the net change was negative:

Diploma

When reviewing the leaderboards above, it’s important to keep in mind some drivers who are impacting driver license counts nationwide.

moratorium – There are currently three running in Montana, Oregon and Oklahoma, as far as we know. These usually run for several years. Mergers and acquisitions would be required to obtain a license in these states.
rule changes – The only interesting rule change we’ve seen is the ability for California farmers to choose a large license option. This allows farmers to consolidate their acreage under one license rather than having to farm many small acreage. We have noted that there are 26 in effect as of June 30th and expect more to be selected
option when their licenses are renewed.
pauses and fumbling – Cannabis licensing season always coincides with cannabis lawsuit season. The New York program has been delayed for a few weeks and some suburban homeowners in Stamford, Connecticut have decided that there should be no cannabis program in Connecticut. Eventually, as part of its burgeoning program, Alabama essentially revoked the licenses and then re-granted them.

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With all this noise, is it any wonder that the industry continues to struggle?

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 led product, marketing and sales while overseeing complex, multi-country product lines in securities, corporate, UCC, safety, environmental and human resources.

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.

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