Cannacurio #92: When and where will new licenses be released?

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Since we founded Cannabiz Media, we have often looked back and reported on the licenses issued by state, activity and status. In this post, we take a look ahead at the jurisdictions that are “likely” to issue tranches of new licenses in the coming year. These future emissions are harder to predict and are subject to the whims and whims of regulatory and legislative hurdles that can slow the process.

Looking back to 2023, the table below shows which states issue the most licenses. Oklahoma is excluded because issuing new licenses has effectively stopped until March 2023.

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But which states do we think will strengthen or outsize their programs? Below, our team has compiled a list based on reviewing regulations, government guidelines, and press reports. Some of these numbers are true estimates (New York), while others, like Minnesota, are based on the state's published guidelines.

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Future approval is difficult to predict. The states mentioned above may add licenses by issuing new ones or expanding from medical to adult licenses. New York is the state most likely to add a significant number of licenses.

new York

The New York program has come under intense scrutiny. Many press outlets gave the following estimates for new licenses:

• Retail Pharmacy: 500 – 1000
• Micro-enterprises: 220
• Indoor Growing (Level 1 – up to 5,000 square feet): 20
• Indoor Growing (Level 2 – between 5,000 and 12,500 square feet): 20
• Processor (Type 1: Extracting, plus all Types 2 and 3 activities): 55
• Processor (Type 2: Infusing and Mixing and all Type 3 activities): 100
• Processors (Type 3: Packaging, labeling and branding, including only for the fulfillment of white labeling agreements): no allocation restriction, OCM checks on an ongoing basis
• Distributors: 30 (does not include processors who also wish to purchase a distribution license)

Reading the program's annual report, the demand to enter this market, based on the number of applications received, is incredible. New York Governor Kathy Hochul called the rollout a disaster, which is why pressure is on the Office of Cannabis Management to do a good job in 2024. I expect many licenses to be issued in the next 10 months.

Virginia

Old Dominion State recently made headlines because the passage of some key provisions of its program was tied to the relocation of D.C. sports teams to Northern Virginia. Related to this was the question of whether Governor Glenn Younkin would approve the program. This program is not scheduled to go on sale until 2025 and it looks like it will be a challenge to get over the finish line.

On March 1, Cannabis Business Times reported that the Virginia Cannabis Control Authority would be able to approve 125 grow sites, 350 stores and 100 manufacturers for a total of 575 – that seems unlikely at this point. The state should begin accepting applications on September 1, 2024.

Minnesota

Minnesota is wisely looking to other states to figure out how to size the program. Earlier this year, the state Office of Cannabis Management released a report titled “An Examination of Cannabis Consumers and Cannabis Demand in Minnesota.” The report estimated the state would need 381 stores to meet demand. This program is scheduled to go live in 2025, and I think there's a good chance they'll hit that milestone.

Maryland

The state currently issues 179 social justice licenses. They include the essential activities in the value chain:

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The lottery was held on March 14 and the winners are expected to be announced soon.

Ohio

Cannabis Business Times has done an excellent job explaining the transition process for existing license holders.

• 23 Level I medical cultivators in Ohio who could apply for up to three adult dispensary licenses,
• 14 Level II farmers who could each apply for an adult dispensary license, according to the DCC. However, many of these farmers are already vertically integrated into retail locations.
• A future licensing round for an additional 40 farmers and 50 pharmacies is also possible.

Those licenses could be issued as early as September 7, with perhaps 173, although that number depends on how many license holders convert.

Delaware

This program is planned for mid-2025. Original projections were for retail and testing licenses to be issued in November 2024, but the new timeline assumes licenses to be awarded in March 2025.

A total of 125 licenses are to be issued:

• 60 farmers
• 30 manufacturers
• 30 retailers
• 5 test laboratories

Final rules are expected to be issued in July and licenses could be accepted as early as September 1st. Delaware has a well-run program and I expect them to meet their deadlines.

Missouri

MO has a history of doing an excellent job of meeting its license deadlines. It plans to issue 96 micro-enterprise licenses as part of its participation program. The state quotes:

• A microbusiness facility is defined as either a microbusiness dispensary or a microbusiness wholesale facility, both of which conduct medical and adult-use marijuana-related businesses.
• A microbusiness differs from a medical or comprehensive facility because it is designed to provide a path to facility ownership for individuals who may not otherwise have easy access to this opportunity, such as individuals with a net worth of less than $250,000 or veterans with a service connection disability.
• Six small business licenses are issued in each of the eight congressional districts, which took effect on December 6, 2018. Of the six in each county, two are microbusiness dispensaries and four are microbusiness wholesale licenses.

In addition to the original licenses, the regulator will issue another 48 in 2024 and another 48 in 2025.

The states mentioned above are scheduled to launch programs or issue a flood of new licenses in 2024 and/or 2025. There are other states that are also trying to achieve these goals, but are encountering hurdles:

• Alabama – Plans include 5 integrated facilities, 12 cultivation, 4 processing and 4 store licenses (3 stores each) with no cap on transportation or testing. Legal battles have slowed that rollout, but licenses are expected in 2024.
• Hawaii – The current regulation is based on an expansion of the current license holders. Each existing medical cannabis dispensary may convert its operations into licenses for three medical cannabis dispensary licenses and three cannabis retail cannabis licenses, but not more than nine licenses in total. Hawaii's Senate and House of Representatives are currently reconciling different versions of the plan.
• New Hampshire – The Granite State plans to sell through state-controlled stores. Some have suggested that the state could become a crop-touching enterprise.
• Kentucky – The bill, which went into effect in March 2023, licenses usual activities and, as is common in Oklahoma, does not impose license caps.
• Washington, D.C. – DC cannot open its own adult-use cannabis market due to lack of statehood. The district is working to convert 25 unlicensed retailers into medical dispensaries.

As we've seen over the last decade, each state is taking a unique approach to licensing – and this will make for a very interesting 2024 and 2025.

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

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