State bud­get deal helps keep cannabis grow­ers in busi­ness

The Fresno Bee (Sunday) - - News - BY AN­DREW SHEELER [email protected]­bune­news.com An­drew Sheeler: 805-781-7934, @an­drew­sheeler

Cal­i­for­nia cannabis farm­ers fac­ing a po­ten­tial “ex­tinc­tion event” could see help in the state bud­get pack­age with mea­sures that would al­low nascent busi­nesses to con­tinue op­er­at­ing with pro­vi­sional li­censes and open op­por­tu­ni­ties for new grow­ers.

The fixes would give the state and local gov­ern­ments more time to de­cide whether to grant an­nual li­censes to mar­i­juana busi­nesses that ob­tained tem­po­rary ones af­ter vot­ers passed Propo­si­tion 64 in 2016 to le­gal­ize recre­ational cannabis.

Thou­sands of com­pa­nies were at risk this year of hav­ing their tem­po­rary li­censes ex­pire be­fore the state or local gov­ern­ments could act on them, throw­ing un­cer­tainty in an in­dus­try the state wants to draw out of the black mar­ket.

The state bud­get deal would grant a five-year ex­ten­sion for the state’s pro­vi­sional li­cens­ing struc­ture, mov­ing its ex­pi­ra­tion date date from Jan. 1, 2020, to Jan. 1, 2025.

The mar­i­juana bud­get bill clar­i­fies how com­pa­nies can ob­tain li­censes, al­low­ing busi­nesses to ap­ply for pro­vi­sional li­censes that can be re­newed with­out first ob­tain­ing a less-se­cure tem­po­rary one.

And, the bud­get pack­age would also give mar­i­juana com­pa­nies a twoyear ex­emp­tion from the state’s main environmen­tal pro­tec­tion law, the Cal­i­for­nia Environmen­tal Qual­ity Act.

“That’s re­ally a big win for not just cul­ti­va­tors but all li­censees,” said Jac­que­line McGowan, a lob­by­ist whose firm, K Street Con­sult­ing, rep­re­sents the cannabis in­dus­try in Sacra­mento.

The Leg­is­la­ture on Thurs­day passed its pri­mary bud­get bill, a $214.8 bil­lion spend­ing pack­age. The mar­i­juana mea­sures are con­tained in a bud­get trailer bill that the Leg­is­la­ture can vote on in com­ing days and adopt as pol­icy with the state bud­get.

Le­gal cannabis grow­ers this year were los­ing their busi­nesses this year as a re­sult of state law pro­hibit­ing re­newals of tem­po­rary li­censes, which are held by thou­sands of grow­ers and re­tail­ers. McGowan has called this mass-ex­pi­ra­tion a po­ten­tial “ex­tinc­tion event” for le­gal mar­i­juana in the Golden State.

She said that the bud­get bills “will make a win­dow open for new op­er­a­tors to ac­quire a pro­vi­sional (li­cense).”

In April alone, 4,000 tem­po­rary li­censes ex­pired, ac­cord­ing to McGowan. She said it’s un­clear how many of those tem­po­rary li­cense hold­ers were able to con­vert to a pro­vi­sional or full an­nual li­cense, but in March, just 52 an­nual li­censes and four pro­vi­sional li­censes had been is­sued, ac­cord­ing to Sen. Mike McGuire, D-Healds­burg.

One of the groups that cham­pi­oned local con­trol of the mar­i­juana in­dus­try, the Cal­i­for­nia State As­so­ci­a­tion of Coun­ties, sup­ports the bud­get bills.

“We do urge the state reg­u­la­tory agen­cies, when im­ple­ment­ing th­ese pro­vi­sions, to en­sure for ad­e­quate local ver­i­fi­ca­tion with cities and coun­ties, in­clud­ing ad­e­quate demon­stra­tion that an op­er­a­tor’s environmen­tal re­view is un­der­way as well as local per­mit­ting,” CSAC rep­re­sen­ta­tive Cara Martin­son wrote in a let­ter to Gov. Gavin New­som and the chairs of the Se­nate and As­sem­bly bud­get com­mit­tees.

The bud­get bills also set forth a new fine struc­ture for vi­o­la­tors of the state cannabis laws. Li­cense­hold­ers would face fines not to ex­ceed $5,000 per vi­o­la­tion, while non-li­cense-hold­ers would see fines of up to $30,000 per vi­o­la­tion, “with due con­sid­er­a­tions as to the ap­pro­pri­ate­ness of the amount,” ac­cord­ing to an anal­y­sis of the bill.

Martin­son wrote that her or­ga­ni­za­tion is “pleased to sup­port in­creased en­force­ment mea­sures that au­tho­rize a li­cens­ing author­ity to is­sue a ci­ta­tion to an un­li­censed en­tity for en­gag­ing in il­le­gal cannabis ac­tiv­i­ties.”

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