Cannabis operators in California who are currently operating under a temporary state license but who have not yet received their annual state license will get some reprieve next year thanks to Senate Bill 1459, which was recently signed into law by Governor Brown. SB 1459 allows the state’s cannabis licensing agencies – the Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health – to issue “provisional licenses” to qualifying applicants until January 1, 2020. The bill has an urgency clause, meaning it is effective immediately.
Provisional licenses are a new type of license that was created by the California state legislature to address the problem of backlogs in processing applications at the local and state levels, and the licensing agencies not being able to issue or renew temporary licenses beyond January 1, 2019. These provisional licenses will be valid for 12 months from the date issued, and they cannot be renewed. Provisional licenses will only be issued until January 1, 2020 but a particular provisional license might expire beyond that date, based on the date it was issued. As is the case with temporary state cannabis licenses, applicants cannot appeal an agency’s refusal to issue a provisional license. Provisional licensees must comply with the state-mandated track and trace system, METRC, which is not required of temporary licensees.
You may be wondering what the process is to apply for these new provisional cannabis licenses. In fact, there is no separate application for provisional licensure. Rather, applicants are eligible to be considered for a provisional license if (1) they currently hold, or have held, a temporary state license for the same premises and same type of commercial cannabis activity that they are seeking to do on an annual basis and (2) they have completed an annual license application for that premises, including evidence that compliance with CEQA is underway and payment of the applicable application fee.
As of the time of writing this post, none of the state cannabis licensing agencies have issued any annual licenses, although rumor has it that the first might be issued later this month. Additionally, many businesses who are operating under a temporary state license are still waiting for full local approval, a process which may not be finished by January.
Read the full text of SB 1459 below:
SECTION 1. Section 26050.2 is added to the Business and Professions Code, to read:
26050.2. (a) A licensing authority may, in its sole discretion, issue a provisional license to an applicant if the following conditions are met:
SEC. 3. The Legislature finds and declares that Section 1 of this act adding Section 26050.2 to the Business and Professions Code furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016.
SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
The significant number of cultivation license applications pending with local authorities that do not have adequate resources to process these applications before the applicants’ temporary licenses expire on January 1, 2019, threatens to create a major disruption in the commercial cannabis marketplace.
CDFA has also published this fact sheet about provisional licenses.
The above information is provided as a public service. It is not intended as legal advice. Written by Lauren Mendelsohn of Law Offices of Omar Figueroa.
For answers to your legal questions or legal assistance, including with establishing and implementing a trade secrets protection plan, please contact the Law Offices of Omar Figueroa at (707) 829-0215 to schedule a confidential legal consultation.
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