In the United States, cultivation licenses are frequently considered by far the most valuable in the highly competitive application processes that most states use to determine who is able to cultivate and dispense in their states. This value is partly derived from the fact many populous states initially only grant a limited number of cultivation licenses. For example, 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 these particular 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 license sold for $26 million.
Indeed, in states with More about cannabiscultivationconsulting.com, those businesses that hold them can see large returns on the investments inside the near term. With artificially limited competition as a result of restricted license classes, cultivators in lots of 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 greater than traditional commercial agriculture.
The present green rush has brought with it a powerful concentrate on 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 capable of yielding greater than 50,000 pounds of flower. While large-scale Canadian producers are building greenhouses inside the countless sq ft and building similar-sized facilities in Europe, Australia, and elsewhere.
But is it trend sustainable? Or are these firms setting themselves up for too long-term failure? As i have said within 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 variety of licenses they grant. As an example, the typical wholesale price of cannabis in Colorado has dropped from nearly $3,500 per pound at the start of legalization in 2013 to roughly $1,012 a pound on April 1, based on 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 the leaves; those leftover leaves are referred to as the trim and could be used to produce cannabis products) is now selling for as little as $50 per pound, that is reportedly driving some cultivators within the state out of business.
This trend will only continue if the federal government`s 80-year try out cannabis prohibition finally comes to a stop. Today the cannabis sector is based on individual state markets, where no product can cross state lines due to laws prohibiting interstate commerce of a federally illegal product. However, when prohibition eventually ends, then interstate commerce will open and businesses will likely be allowed to import their cannabis from any state in the united states. When this occurs, we could expect aprknj large-scale outdoor and greenhouse production will dominate the current market as cannabis commodifies. Many of the same environmental issues that make northern California ideal for the production of grapes for wine will even ensure it is ideal for large-scale commercial cannabis production. The largest greenhouse complex in the country, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is located in Wilcox, Ariz., as the desert conditions allow it to be ideal to manage humidity in a greenhouse setting, a thing that adds a massive additional cost to greenhouse operators on the East Coast. These same conditions will pertain to cannabis.