In the United States, cultivation licenses tend to be viewed as by far the most useful for the highly competitive application processes that many states use to find out who is permitted to cultivate and dispense within their states. This value is partly based on 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 more than 11 million people, granted 12; and New York, 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 fortunate 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 why not try cannabiscultivationconsulting out, those firms that hold them are able to see large returns on their investments in the near term. With artificially limited competition as a result of restricted license classes, cultivators in numerous states have the ability to control pricing and sell their product in large volume. A number of these cultivators grow their product in state-of-the-art indoor warehouses with clean-room environments that resemble pharmaceutical production facilities a lot more than traditional commercial agriculture.
The current green rush has brought along with it a powerful focus on large-scale cannabis cultivation. Across america and around the globe, we routinely hear stories of companies building larger and larger cannabis farms. In Arizona, Colorado, California, and Oregon, cannabis will be cultivated in greenhouses in excess of 250,000 sq. ft. that are capable of yielding a lot more than 50,000 pounds of flower. While large-scale Canadian producers are building greenhouses within the an incredible number of sq . ft . and building similar-sized facilities in Europe, Australia, and elsewhere.
But is this trend sustainable? Or are these firms setting themselves up for too long-term failure? As mentioned inside my previous column Are Canada’s Cannabis Companies Overextended?, were already going to a trend towards large-scale greenhouse and outdoor production, which is driving prices down in states which do not have strict limits on the number of licenses they grant. For example, the typical wholesale expense 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, in which 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 referred to as the trim and may be used to produce cannabis products) has become selling for as low as $50 per pound, which is reportedly driving some cultivators inside the state from business.
This trend will simply continue if the federal government`s 80-year try out cannabis prohibition finally involves an end. Today the cannabis market is defined by individual state markets, where no product can cross state lines due to laws prohibiting interstate commerce of any federally illegal product. However when prohibition eventually ends, then interstate commerce will open and businesses will be able to import their cannabis from any state in the country. At this point, we can expect aprknj large-scale outdoor and greenhouse production will dominate the market as cannabis commodifies. Many of the same environmental issues that make northern California ideal for the creation of grapes for wine will also allow it to be suitable for large-scale commercial cannabis production. The biggest greenhouse complex in the country, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is found in Wilcox, Ariz., since the desert conditions ensure it is ideal to regulate humidity in a greenhouse setting, something that adds a huge additional cost to greenhouse operators on the East Coast. The same conditions will apply to cannabis.