U.S. cannabis business licenses down 6% in first quarter of 2024

The number of active U.S. cannabis business licenses continued to shrink in early 2024, according to CRB Monitor, a marijuana intelligence firm that tracks and monitors licenses in the regulated industry.

Total active licenses – including those in regulated medical and recreational marijuana markets – fell 6% from the fourth quarter of 2023 and by 10% from the first quarter of last year.

The latest licensing numbers mark the fifth consecutive quarter of declines; the number of business permits began shrinking in 2022.

License totals declined on a year-over-year basis for the first time in 2023, when the number of active permits fell 4% compared to 2022 numbers.

The licensing declines come after years of nearly double-digit growth in the rapidly expanding marijuana industry.

Nashville, Tennessee-based CRB Monitor estimates 39,850 active marijuana licenses have been issued throughout the U.S. to cultivators, retailers, manufacturers and other cannabis business types.

The declines can be attributed to:

• A slowdown in the number of new markets opening.
• Delays issuing licenses in newly launched markets.
• Large exits from mature markets such as California and Colorado.
• Moratoriums on issuing new licenses in markets including Oklahoma and Oregon.

Despite the declines, total sales in regulated U.S. adult-use and medical marijuana markets is expected to reach $32.1 billion in 2024 and $58 billion by 2030, according to the new MJBiz Factbook.

Fewer cannabis cultivators

Among the various license categories, cultivation experienced the largest decline in the number of active licenses.

Between the fourth quarter of 2023 and first quarter of 2024, cannabis cultivators dropped more than 1,500 licenses, a decline of almost 8%.

Cultivation is still the largest license category, having ended the first quarter of 2024 with 18,750 total active licenses.

The number of active retail license numbers fell 2% during the same period for a total of 11,724 licenses.

Vertical licensees reverse trend

The number of vertically integrated licenses grew 1.4% during the first quarter of 2024 – the only permit category to experience growth during that period, although the total gain was only 10 licenses.

Despite the gains, vertically integrated licenses have experienced large declines in the past year, losing 34% of active licenses between the first quarter of 2023 and the first quarter of 2024.

Approved and pending licenses increased 1% for the quarter, totaling 4,719 permits across the U.S., although this was a 9% decline from the peak in the third quarter of 2023.

The pipeline of new licenses is expected to slow going into the next quarter.

The number of licenses pending approval declined 64% for the quarter, with 1,907 applications at the end of March.

Breakdown by state

More states experienced declines than gains in the number of active licenses during the first quarter of 2024.

Oklahoma dropped 2,044 active licenses as the state attempts to wrestle control of its initial unlimited-license policy.

The medical-only market at one one point led the nation in total cannabis licenses.

California now has the most active cannabis licenses with 9,433, a 4% drop from last quarter.

New Mexico’s recreational marijuana market continues to expand: The state added 307 licenses in the first quarter of 2024 and has 410 licenses pending approval.

Pre-licensing activity also was notable in New York and Washington, D.C., which together will add more than 600 new licenses on the East Coast.

Andrew Long can be reached at andrew.long@mjbizdaily.com.