The cannabis industry in California could be heading for an “extinction event” if a new law granting extensions on temporary licenses doesn't pass, according to a Sacramento Bee article. This would (obviously) contrast with the optimistic outlook for the potential multibillion industry that has been so widely reported on and followed over the last few years, as the rest of the nation watches California for cues on marijuana legislation.
California lawmakers are on the hook to pass Senate Bill 67, designed to grant about 10,000 marijuana growers extensions to their licenses in the coming months. The bill has been sponsored by Sen. Mike McGuire, D-Healdsburg.
McGuire recently said in a hearing:
“The bottom line is this: This bill is going to protect thousands of cannabis farmers, in particular, who did the right thing and applied for a state license after the passage of Prop. 64 but their temporary license is about to expire.”
As a result of Proposition 64, California regulatory agencies were allowed to grant cannabis businesses a temporary license that was good for 120 days, and that would be eligible for a 90 day extension. A temporary license holder also had the option to apply for a one-year provisional license, in the event of unanticipated delays in becoming compliant with the California Environmental Quality Act.
The point was to allow growers to work while working on applying for their permanent license. But this has contrasted with the state's (lack of) action, which has only granted "just a handful" of provisional and annual licenses. Only 52 full annual licenses have been issued out of more than 6900 applications that were sent to the California Department of Farm and Agriculture.
Many of the temporary licenses are already starting to expire and the deadline to apply for an extension, December 31, 2018, has already passed. This means that state law needs to change, otherwise these temporary license holders will technically wind up operating illegally again.
The new proposed legislation will grant a one-year extension to the deadline, pushing it to December 31, 2019.
“This is the worst way to transition a multibillion-dollar agricultural crop, which employs thousands of Californians. Without legal licenses, there isn’t a legal, regulated market in California. In a time where the Golden State is working overtime to bring the cannabis industry out of the black market and into the light of a legal regulatory environment. We can’t afford to let good actors who want to comply with state law fall out of our regulated market just because timelines are too short and departments have been unable to process applications in time due to the sheer number of applications.”
Jackie McGowan, whose firm K Street Consulting represents the cannabis industry in California, said:
“We’ve named these ‘extinction events. This bill is a bill that the industry is very anxious to see passed.”
Terra Carver, executive director for the Humboldt County Growers Alliance commented:
"If nothing is done, there will be dire consequences such as imminent market collapse of hundreds of businesses in the region and through the state."