In america, cultivation licenses are frequently thought of as the most useful for the highly competitive application processes that a lot of states use to find out who is able to cultivate and dispense in their states. This value is partly derived from the fact many populous states initially only grant a small 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 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 these particular limited permits is fierce, and those companies lucky 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 any money in revenue. Similarly, a pre-revenue New York City license sold for $26 million.
Indeed, in states with Get More Info at cannabiscultivationconsulting, those firms that hold them can see large returns on the investments within the near term. With artificially limited competition as a result of restricted license classes, cultivators in lots of states can control pricing and sell their product in large volume. Many of these cultivators boost their product in state-of-the-art indoor warehouses with clean-room environments that resemble pharmaceutical production facilities greater than traditional commercial agriculture.
The current green rush has taken with it a powerful concentrate on large-scale cannabis cultivation. Across america and round the globe, we routinely hear stories of companies building larger and larger cannabis farms. In Arizona, Colorado, California, and Oregon, cannabis will be cultivated in greenhouses greater than 250,000 sq. ft. that are designed for yielding greater than 50,000 pounds of flower. While large-scale Canadian producers are building greenhouses within the an incredible number of sq . ft . and building similar-sized facilities in Europe, Australia, and elsewhere.
But is it trend sustainable? Or are these businesses setting themselves up for too long-term failure? As mentioned in my previous column Are Canada’s Cannabis Companies Overextended?, were already going to a trend towards large-scale greenhouse and outdoor production, which is driving prices down in states that do not have strict limits on the variety of licenses they grant. For instance, the average wholesale cost of cannabis in Colorado has dropped from nearly $3,500 per pound at the start of legalization in 2013 to roughly $1,012 a pound on April 1, based on 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 its leaves; those leftover leaves are known as 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 within the state out of business.
This trend will only continue when the federal government`s 80-year experiment with cannabis prohibition finally involves an end. Today the cannabis sector 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 is going to be allowed to import their cannabis from the state in the nation. When this occurs, we could expect aprknj large-scale outdoor and greenhouse production will dominate the market as cannabis commodifies. Lots of the same environmental conditions that make northern California ideal for the production of grapes for wine may also ensure it is ideal for large-scale commercial cannabis production. The largest greenhouse complex in the country, estimated at approximately 300 acres (approximately 13 million sq. ft.) of greenhouse space, is found in Wilcox, Ariz., as the desert conditions ensure it is ideal to control humidity in a greenhouse setting, something that adds an enormous additional cost to greenhouse operators on the East Coast. The same conditions will apply to cannabis.