Variety of Hashish Cultivator Licenses in California Down Over
50% Since Finish of 2018

A evaluation of licensing knowledge from
the California Division of Meals and Agriculture’s (CDFA’s) CalCannabis
Division, which licenses and regulates cultivators, reveals a notable uptick in
the variety of annual and provisional licenses issued since early June.
In the meantime, it seems that the overwhelming majority of short-term licenses within the state
will probably be expired by the tip of July.

As of June 26, 2,000 annual and
provisional cultivation licenses have been permitted by CDFA, a 28.3% improve
from earlier within the month, when 1,559 had been issued as of June 4. 592
short-term cultivation licenses additionally remained energetic as of June 26, down sharply
from over 1,050 earlier this month.

Total, 2,592 cultivation
licenses of all sorts remained energetic in California’s licensed system as of
June 26. That determine is down by practically 57% in comparison with simply over 6,000
cultivation licenses of all sorts energetic on the finish of 2018, though on the
time all however a handful had been short-term. Consequently, the variety of growers in
the state which can be capable of promote their merchandise into California’s regulated
market legally has shrunk dramatically.

Moreover, a higher proportion
of California farmers must be monitoring their crops and stock utilizing the
state’s Hashish Monitor-and-Hint system (CCTT). Annual and provisional
licensees are required to make use of the CCTT, whereas short-term ones usually are not. Early this
month, solely about 60% of all energetic licenses had been mandated to make use of the CCTT.
As of June 26, over three-quarters – 77%, to be particular – ought to now be utilizing
the statewide monitoring software program.

The proportion of farmers
compelled to make use of the CCTT system ought to improve to just about 100% by the tip of
July. As of June 26, 527, or 89%, of the 592 energetic short-term cultivation
licenses had been listed as “About to Expire,” that means that they may achieve this inside
30 days of the issuance of the report. Come August, just a few short-term
cultivation licenses will stay legitimate, with most cultivators required to trace
their crops and stock with the CCTT.

Elevated adoption of the CCTT by
growers might have divergent results on out there provide in California’s
licensed market. Whereas it’s not unimaginable to divert product out of a authorized
cannabis system even when a track-and-trace system is current, elevated state
oversight makes cultivators utilizing CCTT much less possible to take action, holding extra
stock within the regulated market.

However, as bigger
proportions of growers undertake the CCTT, California officers can extra simply
test if product being taken in by distributors and offered to retailers is coming
from a licensed supply. Reviews from market contributors final yr said that
unlicensed manufacturing was making its approach into the state’s licensed system in
the absence of CCTT, boosting the quantity of provide out there total and
reducing wholesale demand for product from permitted producers.

It’s doable that reducing quantities
of stock from unlicensed sources getting into California’s regulated market is
contributing to the constructive pattern in wholesale costs within the state. Upward
stress on provide facet charges would additionally presumably end result from the smaller
quantity of sellers licensed in comparison with earlier this yr, along with the
proven fact that the manufacturing of permitted cultivators is usually dearer,
on account of taxes, charges, and elevated prices to function within the regulated market

One other issue making use of upward
stress to our assessments of California wholesale costs is the rising
quantity of transactions for pre-packaged product which can be being noticed. Usually, pre-packaged stock
sells for increased charges on the wholesale market in comparison with analogous bulk
flower. For instance, we have now acquired transaction knowledge from a single vendor in
California exhibiting {that a} pound of product pre-packaged into increments of three.5
grams (an eighth of an oz), can garner practically double the wholesale value of
the identical flower offered in bulk.