On December 7, 2020, a Senate Bill 59 was introduced in the California State Assembly that would extend the expiration of adult-use and medical-use cannabis licenses from January 1, 2022 to January 1, 2028. The text of SB-59 can be found here.
It’s difficult to express the significance of this bill, or any extension to the repeal date of the provisional licenses. Thousands of operators could lose their licensure if the deadline is not extended. The current deadline could once again create a bottleneck in the supply chain and prevent cultivators from meeting statewide demand, just as we saw at the end of 2018.
To obtain a (non-provisional) Annual License for cultivation, California law requires each applicant to obtain a project-specific California Environmental Quality Act (“CEQA”) compliance determination for each licensed property, which has had a greater impact on cultivators. The required environmental impact reviews for each cultivation project site takes longer than originally expected. Although local agencies are working with relevant state regulators to provide a pathway to compliance, most localities have learned that bringing all authorized operators into compliance will require a lot more time than the remaining years allotted to provisional licenses.
For example, though the Mendocino County Cannabis Program has dedicated much of its time to ensuring that the approximately 1100 current phase one applicants in the County receive their permits, the County Board of Supervisors recently stated that the County would need almost 10 years to complete the CEQA review for all applicants. This is very troubling as we reach the end of 2020 and if operators do not reach CEQA compliance by the current provisional license repeal deadline, they will need to cease operations as of January 1, 2022.
So, because the bill was just introduced to the Senate, now is the time for the industry to advocate and express their support for such an extension. All persons that support this bill should contact their state senator and assembly member by phone and/or email and ask them to support this – or any – extension. You can locate your state congressional representative here.
If you have any questions about this or any other legal issue affecting your California-based cannabis business, please do not hesitate to reach out to Emerge.
