US marijuana business licensing stable in early 2025

The U.S. marijuana licensing market remained stable in early 2025, with the total number of active licenses growing less than 1%.

There were 38,509 active business licenses in regulated medical and recreational marijuana markets during the first quarter of 2025, according to a recent report by CRB Monitor, a cannabis intelligence firm that tracks and monitors permits.

Cannabis licensing growth plateaued in the third quarter of 2024 after two years of contraction, where total licenses declined 13%.

Meanwhile, approved/pending and pre-licensing activities declined in the first quarter of 2025, signaling a slowing of businesses entering the market.

Approved/pending licenses fell 5% for the quarter to 5,095, marking the third consecutive quarterly decline in new license approvals.

Applications set for approval slid 12% to 5,493, extending a decline that began in the third quarter of 2024 as a flood of applications in New York moved slowly through the review process.

Recent license growth has been driven largely by fast-growing adult-use markets in Massachusetts, New Jersey and, despite the delays, New York.

“After a period of aggressive expansion and painful corrections, we’re seeing the market settle into equilibrium,” said Steven Kemmerling, CEO of Nashville, Tennessee-based CRB Monitor.

“But stagnation isn’t growth – this could mean tougher competition for existing operators.

“Most markets are now focused on profitability, not expansion. The era of easy money is over.”

Select state highlights

California

While slight, the number of active licenses in California rose for the first time in more than three years.

State licenses grew 1% from the end of 2024, closing out the first quarter of this year with 8,530 operators.

That’s a welcome respite as California lost 30% of its active licensees in the past two years.

Michigan

Michigan remains the third-largest U.S. market in terms of active licenses, even as it shed 138 permits in the quarter and ended at 4,148.

While this is a 3% quarterly decline from the end of 2024, active licenses have grown 17% year-over-year.

New Mexico

New Mexico cannabis licenses grew 27%, with 644 new licenses issued in the first quarter of 2025 – the most of any market.

The state’s explosive growth can be attributed to a laissez-faire licensing regime that is very reminiscent of Oklahoma’s early efforts.

Hopefully, it can avoid the issues that Oklahoma regulators are trying to get a grip on.

Oklahoma

With an ongoing moratorium on new licensing and a crackdown on noncompliant operators, Oklahoma -once the nation’s leader in cannabis licenses – has experienced a 53% drop in active licenses over the past two years.

The trend continued as the state lost 379 active licenses between the end of 2024 and the first quarter of 2025.

That said, the state still has 5,823 active cannabis business licenses, second behind California.

Other states 

There were other states with significant active licensing during the quarter.

Connecticut licenses grew 51%, Illinois 17%, New Jersey 16% and Maryland 11%.

Vermont added the most licenses per capita, granting 52 new licenses during the quarter.

The license market also had a welcome reprieve from a multiyear contraction as no established state market lost more than 10% of its active licenses during the first quarter of 2025.

Oklahoma, Oregon and Michigan experienced the largest decline in the quarter, losing 379, 218 and 138 licenses, respectively.

Consumption-venue licenses continue to grow

One bright spot for cannabis license growth are consumption venues.

This new category of licenses continued to expand in the first quarter, growing 183% since the end of 2024.

This marks a nearly fourfold increase in the past 12 months to 68 licensed clubs, as New Mexico joined Colorado, Michigan and Nevada in establishing social use formats for their markets.

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