Microbusiness licensing is a relatively new, yet growing, concept in U.S. cannabis markets. Today, nearly 2,000 microbusiness licenses have been issued across nine states: California, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New York, and New Mexico. Maine is also considering adding one. Most other states legalized cannabis before the idea emerged and instead use programs like craft cultivator permits or social equity set-asides to support small operators.
Microbusiness licenses were designed to lower barriers to entry and keep cannabis markets diverse on several fronts. Common policy goals include:
Lower Costs: By combining cultivation, manufacturing, and retail into a single smaller-scale license, states cut startup expenses dramatically. For example, one Michigan operator paid just $8,000 in fees versus an estimated $100,000 for three separate full licenses.
Market Diversity: Caps on size and staff prevent large operators from dominating. In New Jersey, microbusinesses are limited to 10 employees and 2,500 sq. ft. Missouri ties micro licenses directly to marginalized and under-represented groups.
Simplified Vertical Integration: Microbusinesses allow seed-to-sale operations on a reduced scale. California’s Type-12 license permits cultivation up to 10,000 sq. ft. plus on-site manufacturing, distribution, and retail. Michigan allows up to 300 plants alongside processing and sales.
Social Equity: States like New York and Missouri prioritize equity applicants, using microbusiness licenses to diversify ownership and expand opportunities for underserved entrepreneurs.
While microbusinesses make entry easier, their design comes with constraints:
Limited Scale: States cap cultivation size and plant counts, limiting economies of scale. Competing with multi-state operators on razor-thin margins can be
Operational Burdens: Managing cultivation, processing, and retail simultaneously may overwhelm small teams.
Restrictions: Residency rules, equity-owner requirements, and bans on wholesale transactions narrow opportunities.
Local Barriers: In some states, municipalities add zoning hurdles that prevent businesses from opening. Minnesota, for example, has seen cities impose land requirements far beyond what license caps allow.
Using Emerald Intel data and our proprietary standardized license types, our research and data scientists used these categories to examine microbusiness licensing trends across eight states.
The table below shows the share of microbusinesses relative to total active licenses in each state with a program:
Although relatively new to adult-use cannabis, New York has quickly become home to 375 microbusinesses, making up 18% of all active licenses in the state. While New York has moved slightly ahead of California in count, California’s mature licensing program is still worth an examination. Many license combinations take the form of fully integrated operations, reflecting more than 150 distinct ways supply chain functions are combined. Below is a breakdown of the functions actually happening under the umbrella of California’s microbusiness licenses:
The most popular license types across all eight states are cultivation and product manufacturer licenses—following closely by distributor licenses.
California has the most license combinations compared to the other states, so we wanted to see how the data changed when California was removed from the table. Across the seven other states, cultivation licenses remain at the top, however, product manufacturer licenses take true second place, followed again, by distributor licenses.
California: 344 active licenses; ~65% include cultivation. Adds supply but still a small slice of the total market.
Massachusetts: Only 17 active The state offers a strong social equity program with several license types exclusively for economic empowerment, creating opportunities for more operators to enter the space.
Missouri: 48 licenses issued in 2023, 48 in 2024, and 48 more expected in 2025. The net active count stands at 72 after revocations, underscoring the challenges smaller operators face in sustaining their businesses.
Minnesota: The state has only issued microbusiness adult use licenses to date, with the first store opening mid-2025. Openings remain slow as cultivation and manufacturing licenses lag, leaving retailers waiting for products to sell.
New York: Microbusinesses represent ~18% of licenses issued, and only six dispensaries were open at the end of 2024. Contribution to sales remains minimal.
New Jersey: The state offers microbusiness status across all license types, with about half of pending approvals in this category, though fewer than ⅓ of active licenses are micros. Of 63 active micros, 48 are retailers, making up 17% of all adult-use retailers and a meaningful share of sales.
Maine: Nearly 2,000 caregiver licenses function similarly to microbusinesses and may explain why the state is considering an official license type.
While microbusinesses are unlikely to drive major revenue in state markets, they do play a critical role in shaping structure and creating opportunities. They offer a lower barrier to entry, foster equity, and give small operators a chance to build seed-to-sale businesses. For now, they remain small but mighty players in an industry dominated by larger operators, but affordable and scalable technology and services can empower them to remain competitive.
Want deeper insight into the licensed microbusiness landscape?
Emerald Intel tracks all active microbusinesses—nearly 2,000—across nine states, plus Maine’s 1,980+ caregiver licenses. Request a demo to explore reliable company and decision-maker intel tailored to your business.