Compared to the farming of most other crops, commercial cannabis cultivation’s impact on the environment is minimal – except when it comes to power use. A large proportion of cannabis cultivation takes place on indoor grow sites, using man-made lighting arrays as a substitute for daylight. These setups and their accessories, including the fans and HVAC systems that prevent the plants from overheating in proximity to the lights, can demand large amounts of power. Unsurprisingly, areas which have legalized cannabis cultivation have seen corresponding increases in energy use: In Colorado, cannabis grow facilities used 200 million kilowatt hours of electricity in 2014, with cannabis cultivation accounting for almost half of Denver’s yearly increase in energy use. For cities and states planning to legalize cannabis while still limiting their use of electricity, regulating the power used by cannabis cultivation is a must.
California’s transition into a regulated market has many operators wondering what the universe of compliance looks like and where they fit into the process. In order to operate legally in California after January 1, 2018, you need both a local authorization and a state license. Temporary licenses from the state of California are sufficient to continue operating, though you will eventually need to obtain an Annual License. To date, 954 cannabis businesses in California have received Cease and Desist letters from the Bureau of Cannabis Control. While some were in error, others were operating without the required licenses for California.
It’s important to understand that licensure is not the end-all-be-all of compliance -- in fact, it is the minimum requirement for your business to operate legally. In addition to having a state license (which requires local authorization), you will need to begin thinking about how to set up your business with compliance processes that facilitate and enable adherence to state regulations for your activities: cannabis microbusiness, retail, manufacturing, cultivation or testing. The below infographic is an overview of the entire licensing/compliance process.
Where does your business fit in?
On January 1, 2018 the state of California began issuing temporary licenses for cannabis operators. We are about halfway through the 120-day period allotted for temporary licenses and the state has allowed an additional 90 day extension so long as businesses submit a complete application for the annual license. Our Los Angeles cannabis attorneys are facing many questions about what happens when the temporary license expires. The answer is that you need to submit for an annual cannabis license from the state.