Cannabis cultivation is experiencing a renaissance in the United States as the draconian prohibition laws of the 20th century slowly wither away, but it’s not really a new phenomenon. Industrial hemp was a staple crop for early American settlers and fueled this country’s earliest economy.
Today, we are beginning to rediscover these roots in parts of the United States, but where cannabis production actually takes place is heavily influenced by the region’s culture and state-level politics. To better understand where this nation’s cannabis comes from and why, let’s start by listing states by cannabis production, then elaborating on the trends and legislation that influence that production.
The Golden State has long been associated with marijuana and today remains the largest cannabis producer in the country. Not only does California have more landmass and a larger population than most other states in the union, but the region’s climate and soil are excellent for agriculture.
Since the ’60s, California’s been notorious for its cannabis culture. It was the first state ever to implement a legal medical marijuana program with Proposition 215, and its history of liberal social policies has helped shape California into the cannabis-producing powerhouse it is today.
That being said, the cannabis industry’s growth in Cali has begun to stagnate. The extreme regulations, cannabis business taxes, and licensing fees which can exceed $75,000, have led many legal cultivators to ask, is it cheaper to start a cannabis business in a different state?
Colorado, along with Washington State, permanently changed the cannabis industry in November of 2012 by voting to formally legalize recreational marijuana. Since then, the state has seen over $10 billion in taxable cannabis sales and experienced a massive influx of tourism, drawing in hordes of stoners from all over the country like a marijuana magnet.
Cultivators in the Mile High State have a penchant for innovative genetics. The state houses some of the largest cannabis seed banks in the country and has hosted revolutionary growers like the Stanley Brothers, who brought CBD to the public’s attention for the first time.
Unlike California, cultivation licensing fees in Colorado aren't quite as bank-breaking, with annual application fees costing $4,000 and renewals landing between $1,100 and $5,300 depending on the size of the operation.
Another pioneer in recreational cannabis, Washington State, manages to produce billions of dollars worth of marijuana annually despite the region’s less than ideal climate for cannabis cultivation. While the state may be known for its lush landscape and towering evergreen trees, the lack of sunlight and overabundance of precipitation doesn’t make for great cannabis growing conditions. As a result, the vast majority of the cannabis produced in Washington is grown indoors.
Areas in Washington, particularly those west of the Cascade Mountains like the city of Seattle, have a rich history of radically progressive politics and counterculture movements. This established culture likely played a significant role in passing Initiative 502, which successfully legalized recreational cannabis in the state despite the lack of precedent.
For cultivators on a budget, Washington looks quite appealing. The cost of cannabis production for burgeoning farmers is significantly less than in other parts of the country, with application fees at only $250 and annual license fees under $1,500.
The third state in the Union to legalize recreational marijuana, Oregon, is a cannabis buyers market. The state, which borders Northern California’s infamous pot-producing region, the Emerald Triangle, has a nearly ideal climate for cannabis cultivation.
Couple this optimal environment with the State’s laissez-faire attitude towards cannabis regulation, and you’ve got what on paper appears to be the perfect place to start a cannabis business. However, you wouldn’t be the only person with the idea.
Within two years of legalizing recreational marijuana, Oregon’s decision not to cap cannabis cultivation licenses or limit out-of-state investment led to massive overproduction of marijuana. While Oregon’s cannabis consumers benefited from low prices driven down by the surplus, many growers found it impossible to break even in the oversaturated market.
Today, Oregon’s marijuana market has somewhat stabilized, but the remaining surpluses continue to drive down wholesale and retail prices.