(This is an abridged edition of the CRB Monitor quarterly report,
which you can download here)
U.S. cannabis licensing activity declined again in the second quarter of 2026, marking another consecutive quarterly decline. The pattern is the familiar one: mature states, carrying price compression and oversaturation, continued to shed licenses, and while a handful of states posted increases, those increases only partly offset the losses. The overall trend has been downward since 2022.
Most of the quarter’s growth came from where we would expect it — newer and emerging markets. Minnesota (+84), New York (+61) and New Jersey (+32) again outpaced the rest of the country in adding active licenses. Michigan, as a mature market, was the exception. Michigan licenses cultivation by canopy size, so an existing cultivator expanding its footprint generates multiple new licenses. One cultivator accounted for 270 of the state’s 354 new medical licenses. That is a single operator adding square footage, not new businesses entering the market, and it may reflect positioning ahead of a possible move to Schedule III.
Two of the quarter’s declines need similar care. New Mexico changed how it reports licensing, moving from business-level to premise-level reporting, which produced a technical drop of 1,101 licenses; the underlying decline was closer to 300. Separately, New York’s pre-license backlog — still several times larger than the rest of the country combined — is almost certainly overstated. The OCM publishes which applicants are approved, but not which are rejected, so applications that have already failed remain counted as pre-license until they can be identified and moved to inactive status. The real figure is likely materially lower and may drop sharply once those records catch up.
The U.S. License Base Is Not Being Replenished
Approved/Pending licenses peaked at 5,654 in Q2 2024 and have declined every quarter since, to 4,063 in Q2 2026 — a 28% decline. At the same time, New Jersey still has 1,459 licenses that are pending final licensure but not yet operational. Other states with a notable number of Approved/Pending licenses include New York (536), DC (324), Illinois (263), Massachusetts (198), and Maryland (187).
This quarter, Approved/Pending cannabis license counts increased in 6 states (Washington, Alaska, Texas, Nebraska, Georgia and Vermont). Washington added another 28 licenses to this status in Q2, but most other states saw increases of only 1-3 licenses. CRB Monitor | crbmonitor.com | 844-672-3282 Q2 2026 U.S. License Activity Review · 2 Meanwhile, 15 states experienced declines in the number of approved and pending licenses. Massachusetts (-25), New Jersey (-14), and Maryland (-14) were the top three states for decreases.
Pre-license applications peaked in Q2 2024 at 6,770, inflated by a single New York window that drew a net 4,886 applications nationally, and have fallen 24% to 5,154 over the last 2 years. Compared to Q1 of 2026, pre-license applications dropped by 3.4% this quarter. Massachusetts (+9) and Washington D.C (+2) were the only two states with an increase in pre-license applications this quarter. 67% (3,458) of all pre-license applications across the U.S. are for retail licenses.
An Added Perspective
When CRB Monitor’s time-tested license data is layered over Whitney Economics’ figures for Total Addressable Market (TAM), the data paints a more complete picture.
California remains the state with the highest number of active licenses, followed by Michigan. These are two of the largest markets in the U.S. by revenue.
Oklahoma ranks third in overall licensing but is expected to fall out of the top 10 as increased enforcement and price declines drive more operators out of the industry. Oklahoma has always been an anomaly in license counts, so this decline is a natural reset for the market.
Rounding out the top 5 are Oregon and Washington, which are among the earliest states to adopt adult-use. Neither Oregon nor Washington has the same controls in place as other states have implemented to balance supply, demand, and operator health. As a result, these two mature markets are over-saturated, and supply is excessive.
Most states with large license bases are relatively smaller markets – both in terms of consumer base and revenue. This creates an environment where licensees struggle, typically leading to greater inflows and outflows of licensees, whether due to new entrants, exits, or mergers.
Efforts by some states, like Massachusetts, to right-size their licensing structures are beginning to bear fruit; however, it is a long process.
Of the ten largest states by license count, only California, New York, and Michigan appear in the top ten by market size. Oklahoma ranks third by licenses and thirtieth by market; Montana ninth and forty-fourth.
Dividing one by the other gives a rough sense of the revenue available to an average licensee. On Whitney’s estimates, New York and Massachusetts sit near $2.4 million per active license while Oklahoma and Montana sit near a quarter of a million — roughly a nine-fold spread. The measure does not adjust for license-type mix – cultivation and a retail license are not comparable units, and vertically integrated operators hold several licenses each.
Conclusion
The Q2 results continue a long-established trend towards a market reset, not a market collapse. Active licenses are declining slowly, the supply-side imbalance that caused the distress is slowly improving, and the surviving operators are in structurally better markets than they were two years ago.
Overall license counts have declined, but further correction is needed to create a more balanced supply-and-demand environment. License and supply saturation have created an environment of economic stress in the industry, and licensees are making the hard choices required to either remain in the market at little to no margin, hoping for reform, or choosing to exit the market.
The data also shows that very few new operators are coming in behind them. For financial institutions and other stakeholders serving the industry, that combination points to a smaller, more stable, and more concentrated customer base — one where depth in existing relationships is likely to matter more than new account acquisition.
The next 6 – 9 months will be telling. Federal reform is on the table, which may change the landscape for licensees. Over this same time period, as more states will have “grown into” their new markets, we can expect to see a decline in license demand – though select states will see opportunities remain in the retail sector. The overall industry will remain hyper-competitive and not for the faint of heart.
