Cannabis stores across Massachusetts are moving more product than in previous years as the number of licensed businesses reaches a record high in what has become a $1.6 billion annual industry. Even so, regulators are weighing a temporary halt on new cultivation licenses as growers grapple with falling wholesale and retail prices.
Massachusetts, like several other states, is facing a glut of product. That imbalance has driven prices down sharply. Data from the state cannabis commission show that the average cost of an eighth of an ounce dropped to $14.20 last November, a steep decline compared with earlier years of the legal market.
According to commission figures, the state has roughly 1-to-1.2 square feet of approved growing canopy for every adult aged 21 and over. That level of production capacity exceeds what is available in nearby Connecticut, where retail prices remain higher.
Regulators have not yet decided whether to implement a freeze. Commissioners recently voted to schedule a future public hearing to examine the proposal. If approved, the moratorium would apply only to new cultivation applications. Permits that are already in progress would continue moving through the system.
Commissioner Kim Roy indicated that many operators are struggling and suggested that a pause could offer some breathing room. She said businesses across the supply chain, from growers to storefronts, are feeling the strain of tighter margins and intense competition.
The number of active cultivators has already declined. State records show 132 cannabis growers currently operating. At the same time, 158 cultivation licenses have lapsed, and 25 approved license holders have yet to launch operations.
Several multistate cannabis companies have also withdrawn from the state in recent years. In 2023, Trulieve closed its operations in the state while Ayr Wellness shuttered a 217,000-square-foot cultivation facility last summer, marking one of the more visible pullbacks in the market.
Massachusetts does not impose a statewide cap on the number of marijuana licenses. That open structure helped fuel rapid expansion after legalization, but has also contributed to today’s crowded landscape.
Other states have tried limiting new entrants, with mixed outcomes. In Oklahoma, a suspension on new medical marijuana licenses remains in place until August as Governor Kevin Stitt pushes for sweeping changes to the industry.
Meanwhile, Oregon adopted a “one in, one out” approach in 2024, allowing a new cultivation permit only when another operator exits or transfers a license. According to law firm Harris Sliwoski, 24 growers left the Oregon market last year.
Legal marijuana markets everywhere have their own fair share of oversaturation, and many companies like SNDL Inc. (NASDAQ: SNDL) are having to come up with innovative ways to not only survive but also thrive under the challenging conditions in the jurisdictions where they have operations.
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