Massive cannabis cultivation exodus is behind licensing contraction

The American cannabis industry continued to contract in the third quarter of 2025 thanks largely to a cultivation exodus, according to licensing data from intelligence firm CRB Monitor.The number of active cannabis business licenses in the U.S.

fell to 37,555, a 1% decline from the previous quarter, continuing a multi-year slide that began at the end of 2022. ADVERTISEMENT Over the past two years, the total number of active licenses nationwide fell by 13%.

Marijuana growers accounted for the majority of license losses during that period.Cultivation permits tumbled by 24%, or just over 5,000 licenses, since the third quarter of 2023, while retail licenses dropped by only 330.

At the same time, the prospect of future growth has weakened.Approved, pending and pre-licensing applications declined for the fifth consecutive quarter.

“This sustained contraction in the growth pipeline reveals a more cautious, strategic posture among entrepreneurs and investors,” CRB Monitor CEO Steven Kemmerling said.The appetite for risk has diminished in the face of market saturation, regulatory hurdles and stalled federal reform, making capital more selective.

The exceptions are in new and emerging markets such as New York, said Kemmerling.“Enthusiasm remains high only where new, large-scale opportunity is perceived to still exist.” New York marijuana market expansion powers national growth The national totals also hide a stark contrast between mature markets and newly launched adult-use states.

“While established markets like California, Oklahoma, and Michigan continue to consolidate, all meaningful growth is being driven by new adult-use frontiers – and New York is the undeniable epicenter,” Kemmerling said.The Empire State alone accounts for the overwhelming majority of all pending retail and vertical license applications.

New York’s ongoing rollout is “completely distorting the national pipeline,” Kemme...