2025 marked a year of adaptation and normalization for the U.S. cannabis industry and this includes the manufacturing sector. After several years of rapid expansion and regulatory experimentation, license activity increasingly reflected localized market conditions rather than broad national growth. In the manufacturing segment three states accounted for 60% of the new manufacturing licenses issued.
The data from 2025 reinforces a central theme of the normalization era: overall contraction at the national level, offset by continued activity in a small number of states. New license issuance slowed meaningfully, total active licenses declined, and the balance between cultivation, manufacturing, and retail remained strikingly consistent— suggesting structural equilibrium rather than cyclical expansion.
In the last of our quarterly recaps, we turn to manufacturing, the least volatile of the three activities we cover. We categorize a manufacturer as a license-holder who processes cannabis-infused products, such as edibles or concentrates, but does not cultivate or sell to customers. These licenses are issued less frequently than cultivation or retail licenses.
Manufacturing licenses remained the least volatile activity category in 2025, though issuance and facility counts both declined.
677 new manufacturing licenses were issued, down from 893 in 2024.
New York led the nation with 250 new licenses (35%), followed by Michigan with 129 (18%).
Total manufacturing licenses declined from 5,960 to 5,629, a 5% decrease.
The relative stability of manufacturing compared to cultivation and retail continues to position it as a more stable segment within the cannabis value chain. As we can see below, three states dominated accounting for 60% of all new manufacturing licenses nationwide in 2025.
In looking across the nation Washington remains atop the leaderboard with 15.6% of all manufacturing licenses. Meanwhile Oklahoma has declined to 12.6% from 13.7% last quarter. Fast mover New York increased to 8.9% of the national total from only 6.1% at the end of last quarter.
The 2025 data confirms that the U.S. cannabis industry has entered a normalization era. Total license counts declined, new issuance slowed, and activity became increasingly concentrated in a small number of jurisdictions. Rather than signaling retrenchment across the board, these trends reflect a market adjusting to structural realities— pricing pressure, regulatory maturity, and constrained capital. 2025 is the year when manufacturing licenses dipped right along with the rest of the license stack and it will likely continue.
Ed Keating spearheads Emerald Intel’s engagement with regulators worldwide, gathering and analyzing corporate, financial, and licensing data to map the evolving cannabis landscape. He is the author of the Emerald Insights blog and host of the Cannacurio podcast. Ed holds a degree from Hamilton College and earned his MBA from the Kellogg School of Management at Northwestern University. He currently serves as Chief Economist at Emerald Intel.
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