As we near the end of California’s first year of legalized cannabis, local authorities governing cannabis licensing have become overwhelmed by the number of cannabis cultivation applications they have received. Accordingly, some jurisdictions with limited resources are incapable of processing these applications prior to when the applicants’ temporary license terminates on January 1, 2019. In September 2019, Senate Bill 1459 (SB 1459) was enacted which enables state cannabis authorities to issue provisional licenses until 2020. The provisional cannabis license is said to be in between a temporary license and an annual license and allows a cannabis business to operate as they would under local and state regulations. The license is valid 12 months from the date issued and it cannot be renewed upon expiration. There are a number of requirements for provisional licenses and subsequent issuance of an annual state cannabis license.
In order to obtain a provisional license, an applicant must have held or hold a temporary license issued by the state agency governing their cannabis activity. Upon expiration or nearing expiration of a temporary license, an applicant may apply for a provisional license as long as they show proof that compliance with California Environment Quality Act (CEQA) is underway and they have completed and paid all state applications materials and fees. Accordingly, provisional licensees do not have to obtain CEQA approval prior to operating under their provisional license. This will streamline the start-up process for many cannabis business owners and allow them to operate as they work on becoming fully-compliant under CEQA. If a provisional licensee wishes to continue operating once their provisional expires, they must submit an annual cannabis business application and receive approval for an annual license prior to the termination of their provisional license.
The unanticipated influx of local and state application has led to many unmet deadlines and unpleased applicants in local jurisdictions, and SB 1459 was passed as a solution to this problem. As California’s cannabis industry continues to evolve, there will be more and more modifications to the current legislation to keep regulations in line with the ever-changing industry. As these changes will most likely have an impact on the developing cannabis industry in California, it is imperative that individuals in the industry, or trying to enter the industry, stay apprised of these modifications to state and local legislation.
California Cannabis Legislation Links:
SB 1459: Cannabis Provisional Licensing