California Could Attempt to Fill the Gaps on Provisional Licensing

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California’s cannabis licensing procedure has been a mess for applicants considering that fairly considerably day one particular. Annual license applications have disappeared into a black hole for months, the window for getting short-term licenses was incredibly smaller and a lot of have expired, and a lot of nearby jurisdictions decided to make up their personal phased permitting processes that in a lot of circumstances ensured that a lot of operators could in no way be eligible for short-term licenses (e.g., Phase three applicants in Los Angeles).

For any applicant who was fortunate sufficient to receive a state short-term license in 2018, efforts are underway at the state level to relieve some of applicants’ fears surrounding the reality that most of these short-term applications are set to expire in the subsequent couple of months and that there is no clear understanding of the provisional licensing procedure. A new California senate bill (SB-67) would reinstate expired short-term licenses and would fill the gaps in the provisional licensing scheme via mid-2020. This would let operators who received short-term licenses in 2018 to really turn out to be operational rather than sit and wait on annual licenses to be issued.

For some background, I wrote not too long ago the provisional licensing scheme that was intended to act as a band-help in light of the reality that short-term licenses had been going away by the finish of 2018 and the reality that annual applications took intense amounts of time to evaluation. To recap: if an operator who as soon as held a short-term license filed an annual application, submitted proof of CEQA compliance, and paid the charge, the state agency could concern a year-extended provisional license. But the provisional licensing regime is not no cost from complications.

The initial concern with provisional licenses is that they are only permitted to be issued via the finish of 2019. This properly placed about a comparable one particular-year time frame as with short-term licenses. The second issue with provisionals is that there has been practically no guidance from the state agencies on how to receive them. The regulations do not mention provisionals, and only the California Division of Meals and Agriculture (or “CDFA”) published guidance on how to get them. That guidance tends to make it seem like they are issued at the CDFA’s total discretion immediately after an applicant tends to make the essential annual filings. This is problematic since there is no clear time frame or evaluation procedure. In other words, an operator could file a comprehensive annual application, and the CDFA could sit on it for months just before issuing a provisional.

SB-67 could possibly just repair some of these complications. SB-67’s important provision is that when an applicant files its annual license application, its short-term licenses shall stay valid—even if these licenses had previously expired. These extended short-term licenses would only remain helpful till an annual license is issued or denied, a provisional license is issued, an application is disqualified or abandoned, or the finish of 2019, whichever is earliest.

This is a lot to unpack, but basically what it indicates is that if applicants file annuals just before the date of  short-term license expiration, these applicants will nonetheless have short-term approval till a provisional license is issued. This will enable dispel any lack of clarity surrounding the provisional licensing procedure but will nonetheless not modify the reality that annuals will will need to be submitted as quickly as doable.

Yet another notable portion about SB-67 is that if passed, it would initial extend the time to concern provisionals via July 1, 2020. This will give the agencies much more time in really issuing provisional licenses previous 2019. But problematically, there will be a six-month window exactly where licensees who do not have provisionals will shed their extended short-term licenses. There might just be a further bill on the table later this year to address this incredibly exact same concern.

SB-67 in the end will only advantage these couple of operators and might signal that the state agencies are nonetheless so overwhelmed with applications that they will not be capable to procedure them on time. We’ll be certain to hold our readers up to speed on any updates on SB-67 or the provisional licensing laws.

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