In the United States, cultivation licenses are often viewed as the most useful for the highly competitive application processes that most states use to determine who is permitted to cultivate and dispense in their states. This value is partly based on the fact many populous states initially only grant a small 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 such 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 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 companies that hold them can see large returns on their investments in the near term. With artificially limited competition due to restricted license classes, cultivators in numerous states have the ability to control pricing then sell their product in large volume. Most 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 current green rush has brought by using it an intense focus on large-scale cannabis cultivation. Across the usa and around 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 capable of yielding a lot more than 50,000 pounds of flower. While large-scale Canadian producers are building greenhouses inside the millions of square feet and building similar-sized facilities in Europe, Australia, and elsewhere.
But is this trend sustainable? Or are these businesses setting themselves up for long-term failure? As i have said within my previous column Are Canada’s Cannabis Companies Overextended?, were already seeing 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 quantity of licenses they grant. For example, the normal wholesale cost of cannabis in Colorado has dropped from nearly $3,500 per pound at the beginning of legalization in 2013 to roughly $1,012 a pound on April 1, in accordance with 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 their leaves; those leftover leaves are called the trim and may be used to produce cannabis products) has become selling for as little as $50 per pound, that is reportedly driving some cultivators inside the state out of business.
This trend will only continue when the federal government`s 80-year test out cannabis prohibition finally concerns a conclusion. 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 be allowed to import their cannabis from the state in the country. When this happens, we are able to expect aprknj large-scale outdoor and greenhouse production will dominate the marketplace as cannabis commodifies. Many of the same environmental issues that make northern California suitable for producing grapes for wine will also make it perfect for large-scale commercial cannabis production. The largest greenhouse complex in the nation, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is located in Wilcox, Ariz., as the desert conditions make it ideal to control humidity in a greenhouse setting, a thing that adds a huge additional cost to greenhouse operators on the East Coast. The same conditions will affect cannabis.