Marijuana Licensing Issue May Lead To "Extinction Event" In California

By Kelly Burch 03/13/19

As many as 10,000 growers will reportedly have their temporary licenses expire over the next new month, if a new bill is not passed.

California farmer touching a cannabis plant

Confusion and delays in the licensing process for legal cannabis growers in California could be an “extinction event” for the marijuana industry if the legislature does not act to correct it, experts say.

When recreational marijuana was approved in California in 2016, growers were able to apply for temporary licensing, The Sacramento Bee reports. This was meant to act as a bridge, while growers applied for and met the criteria for a full annual license.  

However, the state has been incredibly slow to give annual licenses, approving just 52 out of 6,900 applications. This has growers worried, since the deadline to apply for an extension of the temporary licenses expired at the end of 2018.

However, a new bill SB67 would allow growers to apply for an extension until Dec. 31 of this year. 

“We’ve named these ‘extinction events,’” said K Street Consulting’s Jackie McGowan. The consulting firm represents the marijuana industry in California. “This bill is a bill that the industry is very anxious to see passed.”

If it does not pass, many growers will return to the illicit market and legal sellers may have to buy their product from the black market, said state Sen. Mike McGuire, a Democrat who sponsored the bill. 

“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,” he said. 

McGuire said that as many as 10,000 growers will have their temporary licenses expire over the next new month if the bill is not passed. That could have detrimental effects on the industry, he said. 

“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."

Terra Carver, who directs a growers’ alliance in the state, agreed. “There will be dire consequences such as imminent market collapse of hundreds of businesses in the region and through the state,” Carver said. 

McGuire said that having passed marijuana legalization, the state is responsible for ensuring the integrity of establishing the legal market. 

“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,” he said. 

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.