US Cannabis License Count Falls for Seventh Straight Quarter

The US licensed cannabis market closed the first quarter of 2026 with 36,169 active business licenses — down 9% from the same point two years earlier and 1% below the prior quarter, according to data from CRB Monitor, a North American cannabis intelligence firm that tracks licensing records across state and provincial regulators. The figure marks seven consecutive quarters of decline, extending a contraction that began in late 2022 when the national total peaked at roughly 44,323 active licenses.

Seven straight quarters of decline without a recovery interval is not a cyclical dip. CRB Monitor has described the trend as a structural reset driven by compliance-related license revocations in oversupplied markets, saturation in mature states, and a slowdown in new-entrant activity as early-stage cannabis capital has become harder to source.

Where the losses are concentrated

The contraction is not distributed evenly. Established markets with oversupply problems are carrying the largest share.

Michigan lost more than 300 licensed businesses in the first quarter of 2026 — an 8% quarterly decline — leaving the state with 3,719 licensed operators as of March 2026, roughly 10% below its peak in the fall of 2024. California shed another 154 licenses in the quarter, continuing a two-year decline that has cut its licensed operator count by close to a quarter from the 2022 peak. Oklahoma, which has been working through a licensing moratorium and compliance enforcement campaign since 2023, recorded another 5% quarterly drop and has now shed close to half its active licensees over the past two years — though it still ranks among the top states in total licensed operators.

The breakdown by license type shows where the rationalization is sharpest. Cultivation licenses dropped 4% in Q1 2026 to 14,671, consistent with the ongoing pressure on wholesale prices in mature markets. Retail dispensary licenses held flat at 11,459, indicating that consumer-facing operations are proving more durable than the upstream supply chain. Manufacturing and processing were also unchanged at 5,143. Distribution fell 1% to 1,384.

Vertically integrated operators — businesses licensed to cultivate, process, and sell under one structure — grew by less than 1% to 2,372 active licenses, according to CRB Monitor data. That headline growth is partly an artifact of New Mexico’s administrative reclassification of existing operators as vertically integrated; it does not reflect meaningful new-entrant activity at the national level.

New York as a data distortion

The national pipeline metrics are materially distorted by New York, and reading them without that context leads to the wrong conclusions.

New York’s Office of Cannabis Management reported in its March 5, 2026 Cannabis Control Board meeting that roughly 3,958 applications remained pending in its December licensing queue — 2,704 retail dispensaries, 873 microbusinesses, 127 cultivators, 84 processors, and 170 distributors. The board approved 20 new adult-use licenses at that meeting, bringing the state’s total active adult-use licenses to 2,161. At that processing rate, the backlog represents years of clearance time, not quarters.

That bottleneck suppresses the national pipeline metrics. Approved and pending licenses fell 4% in Q1 2026 to 4,175, down 18% from the year-ago period, according to CRB Monitor. Much of that decline reflects New York’s processing pace rather than a true collapse in new-operator demand.

Pre-licensing activity — applications not yet formally in the approval queue — ticked up 4% nationally to 5,352, with most of that concentrated in New York and Texas. The uptick is evidence of continued interest from prospective operators even as existing ones exit. But it does not convert to new active licensed businesses until New York actually clears its backlog, which depends entirely on OCM’s review capacity. The agency noted in the same March 2026 meeting that its licensing team is not expected to grow.

Canada’s stability and the US consolidation read

Canada’s market showed none of the contraction visible in the US. The country ended Q1 2026 with 5,807 licensed businesses, down just five from December 2025 — effectively flat. According to CRB Monitor, Canada has lost 7% of its active licenses over the past two years, compared with 9% in the US. The Canadian trend looks like equilibrium, not continued compression.

For the US, the more useful question is what exits are doing to market structure. The operators leaving California, Oklahoma, and Michigan are disproportionately single-license cultivators and small processors that can’t absorb pricing pressure or compliance costs at the rate multi-site operators can. That dynamic is driving deal activity: acquirers can take on assets, production infrastructure, and customer relationships at discounted prices. M&A and advisory activity in cannabis transactions has followed that pattern as larger operators absorb what smaller ones leave behind.

CRB Monitor’s outlook is measured: the firm has described overall trends in new licensing as pointing toward continued weakness in aggregate store growth for US cannabis retailers. The national floor for active licenses — whether it settles closer to 35,000 or lower — depends substantially on how quickly New York converts its application backlog into operating businesses, and whether that new supply offsets the ongoing exit rates in the country’s largest established markets.