Thousands of Legal Cannabis Businesses At Risk

California Cannabis businesses are on the brink of disaster. A California Senate panel recently Advanced Senate Bill 67 in a last-minute attempt to keep what could be thousands of California legal marijuana companies from being forced out of business.

Cannabis entrepreneurs who are trying to run legal businesses are getting used to the confusion that is rampant in both state and local regulations. Compounding the problem is a general lack of reliable information. That is why it is vital for pot growers, weed distributors and cannabis dispensaries to find help in navigating the difficulties ahead.

Chaos has enveloped the process of licensing in California ever since the early days of marijuana legalization. The reason is an overwhelming pile of State and local laws and their administrators who have repeatedly kicked the can down the road in order to avoid making permanent decisions that could turn out to be unpopular. Temporary licenses were issued all over the state because lawmakers didn’t want to commit and now many of those temporary licenses are expiring and more expirations are on their way — thousands of them.

Senate Bill 67 seeks to allow extensions for temporary licenses that are ready to expire because of slow processes and inadequate capacity in California’s cannabis business regulators. There are three state agencies that govern California’s legal marijuana industry: the California Department of Food and Agriculture (CDFA), the Bureau of Cannabis Control (BCC), and the Department of Public Health (DPH). These agencies have overwhelming backlogs of provisional or annual license applications and, to make matters worse, the temporary licenses that served to get the industry up and running during its first days can no longer be renewed or extended. Legally operating companies have already been forced to close their doors because their permits have expired without any way to remedy the situation.

The result is yet another blow to the legal cannabis business as the Black Market producers and suppliers rush in to supplement dwindling legal products and retailers. It is also another blow to California’s state and local finances as expensive agencies continue to drain money while inadvertently blocking the tax paying enterprises that support them.

Sen. Mike McGuire, the lead sponsor of SB 67, expressed the potential disasterous effects and the need for expedited solutions to the state’s Business, Professions and Economic Development Committee. Although the committee approved the bill with a unanamous bipartisan vote, it could still take months to get the provisions of the bill into law.

Even with an “urgency clause” attached to SB 67, the soonest it could be signed into law by Gov. Gavin Newsom is at least another two months, McGuire said.

Best-case scenario, making it through all policy committees and off the floor of the Senate and Assembly in the next 60-90 days,” McGuire said when asked how soon the bill could get to Newsom’s desk.

By that time, as many as 10,000 temporary business licenses could expire and, even as efforts are underway to find solutions, only four provisional licenses and 52 annual permits have been issued.

Lindsay Robinson, the executive director of the California Cannabis Industry Association, said about 6,200 businesses possess temporary licenses that “could expire by April,” despite having already submitted annual applications, according to a report by Marijuana Business Daily.

Many of these soon-to-expire licenses belong to cultivators … the essential starting point of the cannabis supply chain,” Robinson told the committee. “Should these businesses lapse, the upstream ramifications for the entire cannabis industry could be severe.”

But because the bill may not make it all the way through the legislative process before April, it means 6,200 operators out of 10,000 may face at least a short-term shutdown.

One thing weed entrepreneurs can do to help themselves is to be proactive in following the status of their licenses and permits.

CDFA’s cannabis licensing division told Marijuana Business Daily that processing each permit can take months depending on how complete the information is on the application. For those who need help in filling out the applications or correcting potential problems with their applications, organizations 

like are ready to help.

Your first step in avoiding disaster is to find someone who thoroughly understands the problem and can give you the best advice for your particular situation,” said George Boyadjian, CEO and owner of 420 College. “Quick action is required to make sure your applications are complete and up-to-date. The sooner you do this, the safer your business will be.”

Thousands of Legal Cannabis Businesses At Risk

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George Boyadjian

Founder of 420 College.

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