Hundreds of cannabis businesses in California are operating on temporary business licenses that have passed or are nearing their expiry date. California Governor Gavin Newsom stepped in earlier this month signing two bills, AB 97 and SB 97, that will extend provisional cannabis licenses allowing them to stay open in the interim. Many of these are marijuana dispensaries who would be forced to shut their doors until they received their annual license.
In an effort to level the playing field, these laws will increase funding for a more aggressive enforcement against illegal unlicensed shops. Any business attempting to cultivate, manufacture, or sell cannabis outside of the state regulated system and violates the Medicinal and Adult-Use Cannabis Regulation and Safety Act will be subject to criminal charges.
These amendments specifically detail the process of enforcement stating, “A licensing authority may issue a citation to a licensee or unlicensed person for any act or omission that violates or has violated any provision of [MAUCRSA or its regulations]. Regulators are authorized to assess an administrative fine (per citation) not to exceed . . . thirty thousand dollars ($30,000) per violation by an unlicensed person.”
Fines amount will be assessed based on a variety of factors:
The most important aspect of this legislation for cannabis businesses covers the licensing process and includes all annual applicants in addition to temporary license holders. As long as your marijuana business files a completed annual license application with the state and also demonstrates evidence of compliance with the California Environmental Quality Act (CEQA) compliance. Additionally, businesses seeking provisional cannabis licenses must be permitted by their local city/county or present proof of local authorization.
Provisional licenses will last for one year, but cannabis businesses can renew their provisional cannabis licenses for additional year until January 1, 2022. This will hopefully allow enough time for all qualified applicants to receive their annual licenses before the provisional licenses expire.
California marijuana dispensaries will also be selling some products that are certified organic. Regulations will now mandate all organic products produced from cultivators or manufacturers must submit samples to the organic cannabis certification program. However regulators expect this program to be fully up and running by 2021 and until it is, products will not be allowed to include “organic” on any packaging or promotional materials.
State officials will now be beholden to the new laws that require a social equity program and must channel funding to expand the social equity technical assistance program. Up until now, this program has underperformed, but new regulation could give it the jumpstart it deserves.