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California Medical Marijuana Collectives Face Shutdown as Grace Period Ends

January 9, 2019

Today marks the end of the grace period for California medical marijuana collectives leaving those without a business license no option but to shutdown or face the consequences. After recreational marijuana was approved by the voters, many of the medical marijuana co-ops were grandfathered into the current regulatory system under the previous medical marijuana law.

Grace Period Ends

However, the Bureau of Cannabis Control issued a mandate in January of 2018 that limited their protections to operate unlicensed until January 9th, 2019. In order to remain open, medical marijuana collectives must be licensed by the state or they run the risk of being raided by law enforcement.

Currently the BCC and the California Department of Tax and Fee Administration were unable to ascertain the number of unlicensed medical marijuana collectives in the state, but experts estimate that there are hundreds. L.A. cannabis attorney Michael Chernis notes that the end of the grace period is not to be ignored saying, “It’s significant because, at this point, if you don’t have a license, whatever legal protection you have goes away.”

Limited Access for Medical Patients

Not only will this deadline result in the closure of countless medical marijuana collectives but it will also limit access to hundreds of medical patients. That combined with amount of local bans on cannabis sales is becoming increasingly problematic for medical patients seeking relief. Chernis also noted that, “the stark reality is that for many places in California, licenses are not available.”

Deputy Director of California NORML, Ellen Komp is concerned that the end of the grace period will be counterproductive. She recently stated that, “There will be patients who will have their access interrupted, and some of them won’t be able to access or afford a licensed facility where they can find their medicine. And collective owners will get caught up in the laws, prosecuted civilly or criminally for not having a license.”

Increased Enforcement

It’s very likely that California medical marijuana collectives will see increased enforcement after today, but industry professionals are worried that patients will turn to the black market to get their cannabis. Unfortunately, many of these medical marijuana collectives are classified as non-profits and are unable to afford the expensive licensing costs.

Marijuana Attorney Bill Panzer remarked that, “The state has taken the position that nonprofits still have to get licenses. And a lot of these places can’t afford it, so they’ve been being shut down over the last year. I personally don’t know any (collectives) that have gotten a license and have still continued to operate as a nonprofit.”

This end of the grace period will likely have a dramatic effect on Los Angeles since the city has been slow in issuing licenses for medical marijuana collectives. Hopefully this process can be expedited on the local level so these medical non-profit dispensaries can reopen their doors for profit in 2019.