Three out of four cannabis companies in California are unlicensed


Three out of four cannabis companies in California are unlicensed

The state will award 17 cities and counties grants to help license cannabis businesses. But there could still be bigger problems

Photo: ROBYN BECK / AFP / Getty Images

Almost four years after California began regulating its cannabis industry, three out of four businesses continue to operate under provisional licenses.

Temporary license holders, 75% of the state’s cannabis industry lacks the protections and privileges that come with full licensing, a situation that worries some in the business of selling items made with cannabis.

These interim operators have also failed to pass the environmental reviews required to obtain a full license, something that concerns environmental groups.

Cannabis licensing is a slow process for a number of reasons ranging from the complexity of environmental regulations and the high costs of permits and the shortage of government workers needed to process permits.

For several years, local legislators have expanded the permitting process so that thousands of businesses are not left without a license.

However, California is pushing to change the situation. The state has set aside $ 100 million to help 17 cities and counties for their cannabis businesses to go from temporary to fully licensed.

Los Angeles could opt for $ 22.3 million of that money., while five other southern California cities such as Long Beach, San Diego, Commerce, Adelanto and Desert Hot Springs, will be able to fetch a total of $ 6.9 million. Applications must be submitted before November 15.

Eligible cities say they will use the money to hire staff and, in some cases, to offer direct support to businesses. They trust that in the coming months they can help solve the problem.

While business owners and others applaud state funding, they say it won’t solve everything.

Many cities and counties have been left out of the applicant pool, and as of yet there is no state plan to alleviate the hurdles that caused the delay.

Obstacles have caused delays

Cannabis companies are required to pass a series of environmental protection regulations to prevent unlicensed and unregulated marijuana farms from causing harm. Cannabis producers sometimes divert waterways or contaminate them with pesticides among other problems.

Local legislation approved new provisional licenses until June 30, 2022 and to extend existing provisional licenses until 2025.

As of Friday, October 15, just over 3,000 of the state’s 12,000 active cannabis licenses had full annual permits.

In addition, county law is different from state law so cities have to dedicate staff to help cannabis companies and hire their own cost-increasing consultants. Also, some agencies such as the fire or water department take time to process applications from cannabis businesses.

There are also businesses that have gone through all the procedures, however, they have not obtained a full license.

The delays are also attributed to a shortage of staff to process applications.

Grants of $ 100 million are expected can reduce the delay of companies that they are trying to get a full license.

When the grant money is exhausted, the trade will be able to have enough tax revenue from the cannabis-producing companies to maintain those positions in the future.

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