The American hashish trade continued to contract within the third quarter of 2025 thanks largely to a cultivation exodus, in response to licensing knowledge from intelligence agency CRB Monitor.
The variety of energetic hashish enterprise licenses within the U.S. fell to 37,555, a 1% decline from the earlier quarter, persevering with a multi-year slide that started on the finish of 2022.
Over the previous two years, the full variety of energetic licenses nationwide fell by 13%.
Marijuana growers accounted for almost all of license losses throughout that interval. Cultivation permits tumbled by 24%, or simply over 5,000 licenses, for the reason that third quarter of 2023, whereas retail licenses dropped by solely 330.
On the similar time, the prospect of future development has weakened. Authorised, pending and pre-licensing functions declined for the fifth consecutive quarter.
“This sustained contraction within the development pipeline reveals a extra cautious, strategic posture amongst entrepreneurs and buyers,” CRB Monitor CEO Steven Kemmerling stated.
The urge for food for threat has diminished within the face of market saturation, regulatory hurdles and stalled federal reform, making capital extra selective.
The exceptions are in new and rising markets resembling New York, stated Kemmerling.
“Enthusiasm stays excessive solely the place new, large-scale alternative is perceived to nonetheless exist.”
New York marijuana market enlargement powers nationwide development
The nationwide totals additionally conceal a stark distinction between mature markets and newly launched adult-use states.
“Whereas established markets like California, Oklahoma, and Michigan proceed to consolidate, all significant development is being pushed by new adult-use frontiers – and New York is the plain epicenter,” Kemmerling stated.
The Empire State alone accounts for the overwhelming majority of all pending retail and vertical license functions.
New York’s ongoing rollout is “fully distorting the nationwide pipeline,” Kemmerling stated.
New York led the nation in development for energetic hashish enterprise licenses in Q3, including 155, up nearly 9% from the earlier quarter. The state ended the quarter with nearly 1,910 energetic licenses, rising 71% year-over-year.
That development is poised to proceed into 2026. New York marijuana regulators had been processing some 4,600 pending allow functions on the finish of the third quarter.
However pending litigation in addition to management churn may hamper these rollouts.
Felicia Reid, who had led the Workplace of Hashish Administration since mid-2024, abruptly resigned on the governor’s request earlier this month amid the collapse of a significant state investigation into alleged marijuana inversion involving hundreds of thousands of {dollars}’ value of product.
New York highlights a vital fact, in response to Kemmerling.
“The trade’s future enlargement is now solely depending on the profitable rollout of legalization in new, large-population states,” he stated.
California and Oklahoma hashish markets proceed to chill
Licensed companies continued within the third quarter to exit trade heavyweights California and Oklahoma, which account for 36% of all energetic hashish licenses within the U.S.
California, the nation’s largest hashish market with slightly below $4 billion in projected gross sales, nonetheless leads the nation with 8,048 licenses.
However each the variety of authorized companies and authorized gross sales have been slowly declining because the state struggles with regulatory burdens, excessive taxes and a robust illicit market.
Energetic licenses within the state fell practically 2% from the earlier quarter and eight% for the reason that third quarter of 2024.
To place the determine in perspective, the California hashish market has misplaced extra licenses prior to now 12 months (740) than the full variety of licenses in Arizona and Nevada mixed (654).
A moratorium on new permits in Oklahoma, imposed in 2022 after the state’s low barrier for entry sparked a frenzy, continues to reshape the state’s crowded market by steadily lowering the variety of operators.
The market dropped a couple of fifth of its licenses within the final 12 months, ending the third quarter of 2025 with roughly 5,380 energetic licenses.
Canada hashish licensing comparatively secure
Canada’s hashish market, whereas additionally falling 1% within the third quarter, has remained comparatively secure, with energetic licenses slipping to roughly 5,760.
However that stability follows a two-year decline of 15%, underscoring ongoing market maturation and consolidation.
The quarter additionally confirmed a modest uptick in new functions, although from a traditionally low base.
Energetic Canadian cultivation licenses fell 2.3% from the earlier quarter to about 900 and are down 8% for the reason that third quarter of 2023.
Hashish retail licenses, the most important licensing class in Canada, have fluctuated since 2023 however have largely held regular at about 4,100 licenses.
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Trump marijuana rescheduling could not relaunch hashish trade development
Markets soared after experiences that President Donald Trump may quickly subject an government order classifying marijuana as a much less harmful drug started circulating final week.
Shifting hashish to Schedule 3 of the Managed Substances Act would unlock main tax breaks for plant-touching companies and will persuade cautious buyers who’ve to this point been hesitant to enter the market.
This might shift demand for U.S. hashish companies and licenses heading into 2026, however vital questions and uncertainty stay about its potential affect.
Till then, the info from the third quarter of 2025 confirms that the hashish trade’s period of unchecked development is over, Kemmerling stated.
“We are actually witnessing a protracted interval of rationalization, with energetic licenses declining for practically three consecutive years,” he stated.
“This isn’t an indication of trade failure, however somewhat its maturation—markets are shedding extra capability and weaker operators, paving the best way for a extra secure, environment friendly, and finally sustainable sector.”
Andrew Lengthy might be reached at andrew.lengthy@mjbizdaily.com.
