The modern cannabis industry in the United States got its start in 1996 when California became the first state to adopt medical cannabis legalization. The next major industry milestone occurred in 2012, when voters in both Colorado and Washington State approved the legalization of adult-use cannabis.
Zoom forward to today, and two dozen states have adopted recreational cannabis legalization, and 40 states have adopted medical cannabis legalization measures. While some of those states do not currently permit regulated cannabis sales for one reason or another, most do in some form.
Cannabis industry data analysis company CRB Monitor recently published cannabis licensing data, finding that the nation’s legal industry is retracting from an active business licensing standpoint.
“The cannabis industry in the United States and Canada continues to undergo a significant period of consolidation and rationalization, as evidenced by licensing data from the third quarter (Q3) of 2025. The United States saw a 1% drop in total active business licenses, falling to 37,555, marking a continuation of a multi-year decline that began in late 2022.” CRB Monitor stated about the two countries.
“Canada’s active business licensing exhibited relative stability in Q3, capping a two-year decline of 15%, underscoring similar pressures of market maturation and consolidation. The quarter did show a nascent spark in new Canadian applications, though from a historically low base.” CRB Monitor also stated. The data is part of a recently published report.
MJBizDaily took a deeper dive into the historical data to provide further context, finding that cannabis cultivation business licenses were particularly hard hit by the decline in recent years, with the trend starting a couple of years ago.
“Over the past two years, the total number of active licenses nationwide fell by 13%.” the outlet stated. “Marijuana growers accounted for the majority of license losses during that period. Cultivation permits tumbled by 24%, or just over 5,000 licenses, since the third quarter of 2023, while retail licenses dropped by only 330.”
Whitney Economics released its annual revenue forecast for 2025 last week, and estimates that the legal cannabis industry’s combined revenue in the U.S. will be “between $29.1 billion and $29.6 billion.”
“With U.S. forecasted cannabis revenues coming in at between $29.1 billion and $29.6 billion, projected 2025 revenues will fall below the $30.1 billion level achieved in 2024. Note this is adult-use and medical regulated sales only.” wrote Whitney Economics in its newsletter, announcing its revenue forecast.
Whitney Economics describes itself as creating “value for a global clientele by providing hard data, deep analysis and thought leadership on the U.S. and global hemp and cannabis industries.” Led by internationally acclaimed economist Beau Whitney, Whitney Economics consistently publishes insightful data and information about the emerging cannabis industry.
There are many factors contributing to the decline in active business licenses in the legal U.S. cannabis industry. As with any large emerging industry, there will be people entering the industry that simply don’t make it for one reason or another. Mismanagement, fierce competition, price compression, shifting regulations, and many other factors are at play in the cannabis industry, and it will presumably be quite a while before things level out.