California Lawmakers Running Out of Band Aids for Prop 64's Bullet Wounds

As summer fades into fall and the sun begins to set on 2018, the struggling legal cannabis market in California continues to limp along, hobbled by its own overbearing regulations.

One of the major drags on the system in Cali is the licensing process that all businesses are forced to endure if they hope to operate on the right side of the new Adult Use of Marijuana Act (AUMA) established in 2017 after the voters naively passed Prop 64 in 2016.

In order to get a full annual license from the state, companies must first complete, submit, and gain approval for reams of local business applications in a process that has most municipalities bogged down in the piles of paperwork creating a bottleneck in perhaps the most crucial process on the way to operating legally.

To keep the fledgling industry afloat, the state has resorted to issuing temporary licenses to companies from seed to sale that have yet to navigate all local regulations. These temp licenses are only good for 90 days at a time, at which point they must be renewed. And so it has gone for the entirety of 2018.

Though it has certainly helped California’s legal cannabis market to keep a pulse, state law says that no more temporary licenses may be issued after December 31st of this year.

Simple math says that 90 days after that is March 31st of 2019 and that will mark the last day that the majority of currently legal Cali cannabis companies can operate within the confines of the law as it stands.

Why this deadline was ever set is unknown, but likely speaks to the confidence that state regulators had in being able to implement their program efficiently… something that clearly has not happened. The Bureau of Cannabis Control expected full annual licenses to start going out in high numbers by this past summer but now they’ll be lucky to hit that goal by the summer of ’19.

Lawmakers in California have (sort of) addressed this problem with Senate Bill 1459 which now just waits for Governor Brown’s signature. The bill would allow for new “Provisional” licenses that would be valid for 12 months at a time and is aimed at preventing a “major disruption in the commercial cannabis marketplace”.

The governor is expected to sign the legislation that will make the new provisional licenses available to companies that have applied for their full annual license and can demonstrate that they are in the process of seeking approval from their local authorities.

Basically, it means at least another year of instability for an already highly unstable legal market.

San Francisco attorney Nicole Neubert gave MJBizDaily this prediction, “It’s going to be very bumpy for at least a few more years. This time next year, we’ll be talking about things that people didn’t anticipate or weren’t in the statute that need to be fixed.”

The aim of the bill is to keep the industry shooting straight, but it seems that SB1459 will likely be another Band-Aid on the bullet wound that is Prop 64.

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