In america, cultivation licenses are frequently viewed as the most valuable in the highly competitive application processes that a lot of states use to find out who is permitted 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. As an example, Pennsylvania, with nearly 13 million people, only granted 13 licenses; Florida, having 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 these particular limited permits is fierce, and those companies fortunate enough to win one see sky-high values attached to these licenses just before they become operational. In Florida, a coveted cultivation/dispensary license sold for $40 million prior to the company had seen a dime in revenue. Similarly, a pre-revenue New York license sold for $26 million.
Indeed, in states with Homepage of cannabiscultivationconsulting, those companies that hold them can easily see large returns on the investments in the near term. With artificially limited competition due to restricted license classes, cultivators in numerous states are able to control pricing then 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 a lot more than traditional commercial agriculture.
The existing green rush has brought along with it an intense give attention to 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 has been cultivated in greenhouses more than 250,000 sq. ft. that are designed for yielding more 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 mentioned within my previous column Are Canada’s Cannabis Companies Overextended?, were already going to a trend towards large-scale greenhouse and outdoor production, that is driving prices down in states that do not have strict limits on the quantity of licenses they grant. For instance, the average wholesale price of cannabis in Colorado has dropped from nearly $3,500 per pound at the outset 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 the leaves; those leftover leaves are known as the trim and may be used to produce cannabis products) has become selling for as low as $50 per pound, that is reportedly driving some cultivators within the state from business.
This trend will only continue if the federal government`s 80-year try out cannabis prohibition finally involves an end. Today the cannabis sector is based on individual state markets, where no product can cross state lines because of laws prohibiting interstate commerce of the federally illegal product. But when prohibition eventually ends, then interstate commerce will open and businesses will likely be able to import their cannabis from the state in the united states. When this happens, we are able to expect aprknj large-scale outdoor and greenhouse production will dominate the market as cannabis commodifies. Lots of the same environmental problems that make northern California suitable for producing grapes for wine will even make it 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 located in Wilcox, Ariz., because the desert conditions ensure it is ideal to regulate humidity in a greenhouse setting, something which adds an enormous additional cost to greenhouse operators on the East Coast. The same conditions will affect cannabis.