In the United States, cultivation licenses are often considered by far the most useful for the highly competitive application processes that many states use to determine who is allowed to cultivate and dispense within their states. This value is partly derived from the fact many populous states initially only grant a limited number of cultivation licenses. For instance, Pennsylvania, with nearly 13 million people, only granted 13 licenses; Florida, with a population over 20 million, granted 7; while Ohio, with over 11 million people, granted 12; and New York City, with a population of nearly 20 million people, granted only 5 before recently expanding to 10. For context, Colorado has roughly 1,400 licensed cultivators for a population of just 5.5 million people. Competition for such limited permits is fierce, and those companies lucky enough to win one see sky-high values attached to these licenses even before they become operational. In Florida, a coveted cultivation/dispensary license sold for $40 million before the company had seen any money in revenue. Similarly, a pre-revenue New York City license sold for $26 million.
Indeed, in states with more info here at cannabiscultivationconsulting, those companies that hold them can see large returns on their own investments within the near term. With artificially limited competition because of restricted license classes, cultivators in many states are able to control pricing then sell their product in large volume. Most of these cultivators boost their product in state-of-the-art indoor warehouses with clean-room environments that resemble pharmaceutical production facilities more than traditional commercial agriculture.
The existing green rush has brought by using it an intense give attention to large-scale cannabis cultivation. Across america and round the globe, we routinely hear stories of companies building larger and larger cannabis farms. In Arizona, Colorado, California, and Oregon, cannabis has been cultivated in greenhouses greater than 250,000 sq. ft. that are designed for yielding greater than 50,000 pounds of flower. While large-scale Canadian producers are building greenhouses in the an incredible number of sq . ft . and building similar-sized facilities in Europe, Australia, and elsewhere.
But is that this trend sustainable? Or are these companies setting themselves up for long-term failure? As i have said in my previous column Are Canada’s Cannabis Companies Overextended?, were already going to a trend towards large-scale greenhouse and outdoor production, which can be driving prices down in states that do not have strict limits on the quantity of licenses they grant. For instance, the normal wholesale price of cannabis in Colorado has dropped from nearly $3,500 per pound at the beginning of legalization in 2013 to roughly $1,012 a pound on April 1, in accordance with the Colorado Department of Revenue. In Oregon, where the state ramped up licensing after early product shortages, wholesale marijuana trim (after harvest, the cannabis is trimmed of their leaves; those leftover leaves are called the trim and can be used to produce cannabis products) is currently selling for as little as $50 per pound, that is reportedly driving some cultivators in the state away from business.
This trend is only going to continue if the federal government`s 80-year try out cannabis prohibition finally involves a conclusion. Today the cannabis industry is defined by individual state markets, where no product can cross state lines because of laws prohibiting interstate commerce of any federally illegal product. However, when prohibition eventually ends, then interstate commerce will open and businesses is going to be able to import their cannabis from your state in the nation. At this point, we can expect aprknj large-scale outdoor and greenhouse production will dominate the current market as cannabis commodifies. Many of the same environmental conditions that make northern California ideal for the creation of grapes for wine will even ensure it is ideal for large-scale commercial cannabis production. The biggest greenhouse complex in the nation, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is situated in Wilcox, Ariz., because the desert conditions make it ideal to regulate humidity in a greenhouse setting, something that adds a massive additional cost to greenhouse operators on the East Coast. The same conditions will pertain to cannabis.