In the usa, cultivation licenses tend to be viewed as probably the most useful for the highly competitive application processes that many states use to determine who is able 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, having a population over 20 million, granted 7; while Ohio, with over 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 before they become operational. In Florida, a coveted cultivation/dispensary license sold for $40 million ahead of the company had seen a dime in revenue. Similarly, a pre-revenue New York City license sold for $26 million.
Indeed, in states with Homepage of cannabiscultivationconsulting, those firms that hold them are able to see large returns on their investments in the near term. With artificially limited competition due to restricted license classes, cultivators in numerous states are able to control pricing and sell their product in large volume. Many of these cultivators grow their product in state-of-the-art indoor warehouses with clean-room environments that resemble pharmaceutical production facilities more than traditional commercial agriculture.
The present green rush has taken along with it an intense focus on large-scale cannabis cultivation. Across the United States and round the globe, we routinely hear stories of companies building larger and larger cannabis farms. In Arizona, Colorado, California, and Oregon, cannabis is being cultivated in greenhouses greater than 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 millions of sq ft and building similar-sized facilities in Europe, Australia, and elsewhere.
But is that this trend sustainable? Or are these businesses setting themselves up for long-term failure? As i have said inside 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 which do not have strict limits on the number of licenses they grant. As an example, the normal wholesale expense 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, in accordance with the Colorado Department of Revenue. In Oregon, where 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 may be used to produce cannabis products) is currently selling for as little as $50 per pound, that is reportedly driving some cultivators within the state away from business.
This trend will simply continue if the federal government`s 80-year test out cannabis prohibition finally involves an end. Today the cannabis industry is based on individual state markets, where no product can cross state lines as a result of laws prohibiting interstate commerce of a federally illegal product. But when prohibition eventually ends, then interstate commerce will open and businesses will likely be able to import their cannabis from your state in the united states. When this occurs, we are able to expect aprknj large-scale outdoor and greenhouse production will dominate the current market as cannabis commodifies. Most of the same environmental conditions that make northern California perfect for producing grapes for wine will also ensure it is perfect for large-scale commercial cannabis production. The largest greenhouse complex in the united states, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is found in Wilcox, Ariz., as the desert conditions ensure it is ideal to manage humidity in a greenhouse setting, something which adds a massive additional cost to greenhouse operators on the East Coast. These same conditions will pertain to cannabis.