California approves bill to extend provisional permits, curtail illicit cannabis firms
The California Legislature approved – and Gov. Gavin Newsom signed into law – a marijuana regulatory package that includes both an extension for provisional business licenses and a new tool for regulators to crack down on unlicensed growers and retailers.
On June 11, 2019 the California Senate approved an amended version of Assembly Bill AB-97 effectively allowing state agencies to issue provisional licenses to all cannabis operators -- including those who do not currently hold a temporary license. Under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which regulates the licensure of cannabis in the state of California, only those who held or hold a state temporary license for the same premises and commercial activity applying for were eligible to obtain a provisional license prior to the recent amendment of AB-97. The new legislation will allow new cannabis businesses who have not received temporary licenses from the state to directly apply for a provisional license following approval from their local jurisdiction.
Provisional state licenses are valid for 12 months and intended to prevent a lapse in operations, as the Sunset Clause in MAUCRSA prohibited temporary state licenses from being issued or extended past December 31, 2018. For information, read our previous blog post on the Sunset Clause and temporary licenses.
Under California law, cannabis operators must hold a valid local license issued by a city or county in addition to a state license issued by the Bureau of Cannabis Control (BCC), California Department of Food and Agriculture (CDFA), or California Department of Public Health (CDPH). The amended bill removes the requirement that only applicants who held or hold a temporary state license are eligible for a provisional license, allowing the state agencies to issue provisional licenses at their own discretion. This is big news for applicants currently going through the licensing process or just getting started as it can take several months for the state to review annual applications, and a lapse in operations can have costly consequences.
What are the requirements for a provisional license?
To be eligible for a provisional license, applicants must submit a completed annual application and evidence that compliance with the California Environmental Quality Act (CEQA) or local cannabis ordinance is underway. Complying with CEQA is a process required by any person or business applying for a permit or license with the city, county or state in California. The purpose of CEQA is to mitigate any foreseeable direct or indirect change to the environment any type of project may impose, and cannabis projects are not an exception. Check with your local jurisdiction for the city or county’s process in complying with CEQA.
For more information on the recent changes in provisional licensing eligibility, you can read the amendments to AB-97 or contact a member of our team.