The number of inactive marijuana business licenses in California has now surpassed active ones, highlighting ongoing struggles in the state’s legal industry.
An analysis by SFGate found that 10,828 marijuana business licenses in California are now inactive or surrendered, compared to 8,514 active licenses. Jonatan Cvetko, executive director of the United Cannabis Business Association, described the situation as a “complete failure.”
A 2023 rule change allowing cannabis cultivators to consolidate smaller licenses into larger ones accounted for 1,071 inactive licenses. The breakdown of inactive licenses includes over 1,100 distribution licenses, nearly 500 delivery licenses, and more than 300 retail licenses.
California’s struggles stem from a variety of factors, including high taxation and strict regulations,
This trend is not limited to California. Across the United States, the number of active cannabis business licenses has continued to decline, as reductions in established markets outpace growth in emerging ones. MJBizDaily reported in November that the decline persisted through the third quarter of 2024, citing data from CRB Monitor.
California was the first state to legalize medical marijuana in 1996 through Proposition 215. Voters later approved Proposition 64 in 2016, legalizing recreational use, four years after Colorado and Washington became the first states to do so. The first licensed recreational marijuana stores in the state opened on January 1, 2018, marking the official launch of the retail market.
