Cannacurio #88: 2023 year-end best list for growing
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Following on from our recent review of dispensaries and retailers, we now look at cultivation licenses. These “census” snapshots come from our Cannabiz Business Intelligence platform, where we track new license issuances and determine market-to-market balance of power. Over the past decade, clients have used this information for go-to-market strategies, competitive assessments, and TAM analysis.
- Regulators issued 62% fewer cultivation licenses in 2023 compared to 2022
- Michigan issued nearly 35% of new cultivation licenses this year
- 78% of last year's new licenses came from California, Oklahoma and Michigan
The number of new driving licenses issued has fallen dramatically compared to previous years. Only 2,253 new driver's licenses were issued last year, compared to 6,010 in 2022. In 2021 there were 9,010! There are a number of factors that can explain this:
- Oklahoma's moratorium finally went into effect. Regulators issued 332 new licenses in the first quarter, but only 15 more in the last nine months.
- Some California growers have signed up for the large license option. We counted 42 of them and they allow growers to consolidate smaller licenses with this new qualification. This will reduce the number of licenses, although the number of establishments may remain stable.
- As flower prices fell, the number of total licenses fell from 22,484 to 18,707 – suggesting farmers have exited the industry.
The table below shows the year-end summary of new cultivation licenses added per month last year. Michigan rose to the top of the leaderboard in 2023, adding more than the next two states combined (CA and OK). Vermont rounded out the top four with 217 new licenses.
If you look at the monthly emissions, there is clearly a downward trend, which is mainly driven by the larger emitting countries:
As we have discussed in previous posts, regulatory changes have impacted new and existing cultivation licenses.
- California: Effective January 1, 2023, the California Department of Cannabis Control issued major indoor, outdoor, and mixed-use licenses. These are each 22,000 square feet or larger than 1 acre. To date, 42 have been issued and annual royalties have been set at $13,900 to $77,905.
- Oklahoma: Oklahoma issued a moratorium starting August 26, 2022. It was extended through 2026 as lawmakers and regulators worked to get a handle on a program that had run amok. The state has cut nearly 2,500 cultivation licenses this year, from 7,075 to 4,605 (-35%).
- Oregon: The state is still under a new licensing moratorium as of January 2022, but that is scheduled to end in April 2024.
The table below is a snapshot of this in total Cultivation licenses by state as of December 2023. 6 states account for almost 83% of total licenses: California, Oklahoma, Michigan, Oregon, Colorado and Washington. Last year, the same six states accounted for 90%.
The number of licenses issued has fallen dramatically and the total number of licenses has also fallen. Cannabiz Media has also seen a decline in the number of farms across the country. There are a variety of reasons for this, with oversupply and legacy markets probably being at the top of the list. With each state functioning as an isolated market, this phenomenon will continue.
As the Northeast slowly comes online, we expect more licenses to be issued. Two states we'll be keeping an eye on are Vermont, which is temporarily halting new licenses for large cannabis growers to protect smaller, local growers; and New Hampshire are exploring distribution similar to their state's liquor program.
Cannabiz Media customers can stay up to date on these and other new licenses through our newsletter, alerts and reporting modules. Subscribe to our newsletter to receive these weekly reports straight to your inbox. Or you can schedule a demo to get more information about how you can access the Cannabiz media license database yourself and dive deeper into this data.
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 securities, corporate, UCC, security, environmental and human resources.
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.
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.