The U.S. marijuana industry continued to shrink in the second quarter of 2025, according to new figures from CRB Monitor, a firm that tracks licensing in the regulated market. The total number of active permits fell 2% during the quarter, leaving 37,889 licensed operators nationwide.
The decline is part of a longer trend that began in 2022 after the early boom in marijuana businesses cooled off. Over the last two years, active licenses across the country have dropped by roughly 13%. Analysts point to consolidation in mature states and slower development in emerging markets as the main drivers.
Pending and approved licenses, which usually indicate new operators, fell 14% in the quarter to 4,391. That’s down 18% compared with 2024 and 23% compared with 2023. Pre-license submissions also slipped 4% to 5,260, marking a 16% decline over six months.
New York continues to dominate when it comes to applications, accounting for nearly 90% of all filings nationwide. By June’s end, almost 4,700 applicants were still waiting on decisions, showing how the state has become the main source of licensing activity despite the national slowdown.
Looking at license categories, retail and cultivation remain the largest segments, together making up close to three-quarters of all active permits. Cultivation licenses dipped slightly to 16,343, while retail held steady at 11,527. Oregon, California, Michigan, and Oklahoma together make up nearly half of the totals.
Distribution and manufacturing licenses were hit harder, each falling 5% to 1,399 and 5,338, respectively.
Companies holding multiple permit types have more than doubled in number over the last two years, now exceeding 2,200. Even so, the category declined 4%, much of it due to New Mexico’s reclassification of licensees rather than new entrants.
One of the few bright spots was in social-use clubs, or cannabis lounges. These venues grew 18% nationwide to reach 80 licensed locations. That’s a fourfold increase in a single year, largely due to new programs in Michigan, Colorado, Nevada, and New Jersey.
Approval numbers across all categories moved downward. New cultivation permits dropped to 947, which is 35% below last year’s. Retail approvals fell to 2123, an 8% decline, the lowest in two years. Pending delivery permits fell the hardest, cutting in half to 207. Testing facilities approvals slipped 10%, while manufacturers shrank 16%. Out of 46 regulated markets, 19 added licenses, while nine saw declines.
At the state level, Oklahoma and California recorded the steepest declines, with California losing 358 licenses, bringing its two-year drop to 23%. Oklahoma’s freeze on new permits and tougher enforcement trimmed another 4%, reducing its total to 5,564, less than half of what it was eight quarters ago.
On the other hand, Michigan grew 3% to 4,269 active licenses, and New York added 153 new approvals, a 10% increase and more than double last year’s total. Connecticut and Ohio also posted gains of 14% and 9%, respectively.
North of the border, Canada’s market remained steadier. Active licenses inched up 1% to 5,806, although they are still 15% lower than in 2023. Retail dominates with more than 4,100 stores, up 2%. Processing and cultivation also grew 2%, while wholesale distribution fell 44% to only 39 licenses. Applications rose 24% to 140, though interest remains far below 2023 levels.
Overall, the data shows that the industry is maturing. While the U.S. market works through oversupply, regulatory hurdles, and inconsistent demand, Canada is moving into a steadier period. Growth opportunities appear limited to smaller segments, with social-use venues standing out as one of the few areas of notable expansion.
It would be interesting to interact with individual companies like TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) for insights on how they have evolved over time to remain operating as the market has changed and faced many headwinds.
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