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Cannacurio #43: Where Will the Next Cannabis Licenses Be Issued? | Cannabiz Media

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You cannot read a cannabis industry newsletter these days without seeing articles that hype the future impact of New York, New Jersey, Virginia, and New Mexico adult use programs. It even affects the stock prices of the Canadian licensed producers because the uninitiated believe these companies will benefit from new US programs. However, observers like us know that there is lag between the issuing of the state’s press releases and new licenses being issued – and even longer for revenue to be generated.  

However, all is not lost as there are some “warm-up bands” on stage that have or will be issuing licenses before the big licensing events in NY, NJ, VA, and NM.

Delaware

Three new companies were awarded licenses after an RFP process concluded in February: Valor Craft Cannabis Company in New Castle, CannTech Research in Dover and Georgetown, and EzyCure LLC in Harrington. Each of the new licensees, chosen from 10 different applicants, has previous experience in the cannabis industry either in Delaware or elsewhere according to Delaware Business Times.

cannabis license applicants

Rhode Island

The Rhode Island program has three dispensaries and 60 cultivators. The dispensaries have been open since 2013 and 2014 and they have tried to fiercely defend their oligopoly. The state received 45 applications for a lottery to operate six new dispensaries and has since issued an RFP for a firm or individual to conduct a lottery to award the licenses on or about May 14, 2021. Other factors:

  • The state has expensive fees for license acquisition and renewals
  • Governor Gina Raimondo was a big proponent of the program but has now left to join President Biden’s Cabinet
  • Rhode Island’s new governor put marijuana legalization plan in budget, days after lawmakers filed a competing plan

This is a small market that may soon be surrounded by adult use programs in the Northeast. Everywhere is a short drive from Rhode Island, so they may be price takers if they are not mindful of what is happening across the borders and in the region.

Georgia

Georgia has a low THC oil program that is challenging for patients and their families. The oil has to be sourced out of state and patients needed a waiver. The state is expanding the program in 2021.

Georgia’s Access to Medical Cannabis Commission received 70 applications for six production licenses. The commission may issue up to two Class 1 production licenses, which permits growing cannabis indoors for low THC oil and is limited to 100,000 square feet of cultivation space. They may also issue up to four Class 2 production licenses, which allows for growing cannabis for low THC oil with a limitation of 50,000 square feet of cultivation space.

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  • Winners are now expected to be announced by midyear, and the state is still determining rules for dispensaries.
  • A collection of MSO’s have set up shop in the state and have been involved in lobbying over the last few years.

Georgia is a populous state that is adjacent to Florida. The Sunshine State also began with a low THC program and migrated to a medical marijuana system with over 300 dispensaries. The state is now making adult use rumblings. 

For Georgia, it will be important to see how they choose to set up their dispensary rules and regs as some entrepreneurs with a long view may try to get that license foothold and parlay it into a true medical license and eventually an adult use one if the regulations change. Some of Florida’s license winners chose this path and cashed out. The latest proposal is that each Producer can operate five stores in the state.

Washington DC

The district has a program that defies easy description. Possession is allowed but selling is not. As a result, residents got creative to work around the rules and rely on creative barter like selling $100 T-shirts that include a free gift of cannabis.  

According to MJBiz Daily, the new regulator – the District’s Alcoholic Beverage Regulatory Agency (ABRA) – has taken steps to boost medical marijuana patient counts and make it easier for companies to operate. The ABRA also would likely play a key part in rolling out a new recreational program.

According to ABRA, there are two cultivation and two testing licenses that still have not been awarded. There is also one dispensary license available for Ward 3 or 5. Earlier in March, ABRA issued a window for interested parties to file Letters of Intent for the remaining five licenses.

Washington is a small market, though it may have statehood going for it soon. The surrounding states of Virginia, Maryland, and Delaware all have programs – and VA has just added adult use. If the DC program is not expanded, District residents will cross the border and/or use illicit suppliers – a challenge similar to what Rhode Island may face.

Conclusions

While many focus on the big license producing states like California, Oklahoma, Colorado, Washington, and Oregon where over 83% of the nation’s licenses are issued, we miss out on other states that are quietly issuing licenses or are evaluating their programs. All of the programs outlined above are “limited license” states – for now – and may present opportunities for those who are patient, have capital, and have connections or partners in those states.  

The issues raised are not new. With states able to craft their own rules for regulated products like tobacco, alcohol, gasoline, and even lottery tickets, the cross-border shopping issue comes into play. The newness of cannabis and the tax dollars that go with it will drive a lot of the policy making and may lead to a harmonization of regulations in some parts of the country.

Author

Ed Keating is a co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. He has spent his career working with and advising information companies in the compliance space. Ed has managed product, marketing, and sales while overseeing complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental, and human resource markets.  

At Cannabiz Media, Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products, and businesses in the cannabis economy.  

Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.

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Source: https://www.cannabiz.media/blog/cannacurio-43-where-will-the-next-cannabis-licenses-be-issued

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