In the second quarter of 2025, the number of active marijuana business licenses in the United States fell by 2%, according to data released by Intelligence CRB Monitor.
During the initial boom, the business fell to 37,889 licensed businesses continued a multi-year contraction.
The number of active licenses nationwide has dropped by 13% over the past two years, reflecting the consolidation of mature markets and the slower growth of newer markets.
Despite short stability earlier this year, a combination of declines in approvals and a reduction in new applications is driving a continued prudent shift in the expansion of the cannabis business.
“What we’re witnessing is a huge rationalization of the U.S. cannabis industry,” said Steven Kemmerling, CEO of CRB Monitor.
“The initial licensing boom has faded, and now the market is ruthlessly depriving too much capacity,” Kemerlin added.
“This is a painful but necessary phase that will ultimately create a more stable and sustainable foundation for future growth.”
Approvals dropped sharply, pending permits continued
The approved and pending licenses are considered the pipeline for future operations, down 14% to 4,391 in the fourth consecutive quarter.
The total number is down 18% from the end of 2024 and 23% from the same period last year.
Pre-licensing applications also fell 4% to 5,261.
That’s 16% six months ago, 22% below the mid-2024 level.
Despite overall slowdowns, New York remains the country’s most active application market, with nearly 9 of nearly 10 submissions nationwide.
At the end of June, nearly 4,700 applicants were awaiting a decision, highlighting how the Imperial State continues to promote national licensing activities, even if other regions are cool.
“Currently, the story of the American cannabis market is the story of New York,” Kammerlin noted.
“Its unprecedented volume of applications is an outlier that is biased towards national images,” he added.
“While it represents a huge potential for the future, it also highlights how application activity in other states, including previous hotspots, has stalled.”
The license type displays different results
The farming and retail licenses that account for nearly three-quarters of the U.S. market are basically flat.
Farming allowed a drop of 2% to 16,343, while retail did not change to 11,527.
California, Oklahoma, Michigan and Oregon account for almost half of these permits.
Manufacturing and distribution licensing were sharper, down about 5% to 5,338 and 1,399 respectively.
Vertical integrated operators, businesses holding multiple license types, have grown the fastest, more than doubled in two years to more than 2,200.
Nevertheless, the category fell 4% in the quarter, with much of the growth attributed to the reclassification of existing licensees in New Mexico rather than new business creations.
Although most licensing categories are signed, social use clubs are a highlight.
Nationwide, the number of licensed cannabis consumption sites has increased by 18% to 80, a quadrupled over the past year as states such as Colorado, New Jersey, Nevada and Michigan launched social consumption programs.
New approvals drop sharply
The number of newly approved licenses falls in all major categories.
Plant approvals fell 14% to 947, 35% lower than the same period last year.
Retail approvals fell 8% to 2,123, marking a two-year low. The waiting delivery permit experienced the steepest fall, reducing to 207.
Other departments, including manufacturers and testing facilities, are also signed.
Manufacturer approvals fell 16% in the quarter, while test facilities approvals fell 10% to just 19 nationwide.
State trend divergence
There are 19 of the 46 regulated markets that have added licenses and 9 signed contracts.
Among the major national markets, California and Oklahoma recorded some of the biggest losses.
California signed 358 licenses, down 4%, and its two-year contraction was 23%.
Oklahoma’s moratorium on new licensing and enforcement measures targeting non-standard operators has cut its licensing number by another 4% to 5,564, down more than half in the past eight quarters.
Michigan, by comparison, expanded 3% to 4,269 active licenses, strengthening its position as the third largest cannabis market in the United States.
New York again led to growth, adding 153 new licenses, up 10% in the quarter and 158% in the past year.
Other states showing earnings include:
- Connecticut, up 14%.
- Washington, DC, its licensee doubled.
- Ohio, which launched adult use sales a year ago, rose 9%.
Canada remains stable
In Canada, licensing levels remain relatively stable.
Active licenses rose 1% to 5,806, although the figure was still below level 15% two years ago.
Retail remains the largest category, with over 4,100 active pharmacies, a 2% increase.
Each cultivation and processing grew by 2%, while the wholesale distribution was only 44%, with only 39 active licensees.
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Applications in Canada rose 24% to 140 in the quarter, providing a modest sign of new interest. Despite this, the application is still far below the 2023 level.
Cannabis industry recalibrates
Data shows that after years of rapid expansion, legal marijuana is continuing to rationalize.
The U.S. market is adapting to regulatory uncertainty, oversupply and uneven demand, while Canada entered a period of stability after a sharp and early contraction.
To sum up, the data reflects a mature cannabis industry focused on efficiency and consolidation, with only segments (such as social consumption) providing recent recent growth.
You can contact Andrew Long at andrew.long@mjbizdaily.com.
