California Licensing 101: Big Changes On The Horizon

 

If you’re a California cannabis entrepreneur or an existing operator looking to expand your business, big changes are on the horizon that will make your initial licensing and/or licensing renewal process vastly more costly, complicated, and time-consuming. If you’ve been keeping an eye on regulatory changes in the state of California, then you already know there is cause for concern as the state phases out provisional licensing forcing everyone to undergo the long, expensive, and fraught California Environmental Quality Act (CEQA) process. If you haven’t been following California cannabis regulatory changes, then let’s discuss what the future holds.

Governor Newsom signed the Cannabis Trailer Bill which consolidated the Bureau of Cannabis Control, the CalCannabis Cultivation Licensing division, and the Manufactured Cannabis Safety Branch into a single regulatory body called the Department of Cannabis Control (DCC).

6-Minute Demo of RMCC’s Source-of-Truth State Regulatory Matrices

The DCC renumbered the various agencies’ regulations and moved them into CCR, Title 4, Division 19. The DCC stated their intent to update the combined regulations to resolve inconsistencies between the three sets of regulations and to address a number of issues including CEQA and the provisional licensing process.

If you’re looking for a quick way to stay on top of these regulatory changes, consider letting RMCC do the hard work for you and get access to our California Regulatory Matrix through the Compliance Marketplace. 

The Cannabis Trailer Bill allows cannabis entrepreneurs to apply for provisional licenses until June 30, 2022 as long as the application is submitted by March 31, 2022. If you’ve been thinking about starting a cannabis operation or getting additional licenses for your existing cannabis business, don’t miss your opportunity to get the last of the provisional licenses. This is especially crucial for those seeking local licensure in jurisdictions that lack a formal CEQA review process as getting through the CEQA review process will be especially chaotic and difficult. 

Get those applications in as soon as possible but no later than March 31, 2022.

If you’re currently working outside of the cannabis industry or you’re busy running your existing cannabis operations, we know how overwhelming it is to add the licensing process to your already lengthy to-do list. You likely don’t have the time to manage the details and minutiae that come with the licensing process, especially if you're seeking multiple licenses in your expansion plan. Let RMCC do the heavy lifting for you. Book time with Lindsey Kincade, RMCC’s Chief Compliance Officer to discuss your cannabis licensing needs. Not quite ready to start the conversation? Get an idea of what you will need for your licensing effort and download RMCC’s free Security Plan template.

If you currently hold a provisional license or are seeking a provisional license, you will need to transition to an annual license by January 1, 2025. This means the CEQA review by the locality has to be concluded prior to commencing operations. 

CEQA-Litigation-Graphic.png

Why is CEQA such a daunting barrier to cannabis licensing?

CEQA litigation is often abused by Not In My Back Yard (NIMBY) anti-cannabis activists and even cannabis competitors to bring an abrupt halt to a cannabis entrepreneur’s licensing effort. Labor unions have even been known to file CEQA litigation to secure agreements.

While CEQA is rightly an intimidating obstacle to receiving your annual cannabis license, RMCC’s licensing experts can help you manage the process successfully.

CA Cannabis Cultivation Licensing Milestones.png

How does the CEQA process typically work?

Let’s discuss in more detail how the CEQA review process should work:

  1. Local government determines if the proposed cannabis operation qualifies as a “project” subject to CEQA.

  2. If the local jurisdiction determines the proposed cannabis operation qualifies as a “project” that is subject to CEQA, then the local government determines if the project is exempt based on the law.

  3. If the local jurisdiction determines that the project is subject to CEQA and is not exempt based on the law, the local government completes an initial study determining if the project could potentially impact the environment.

  4. The local government uses the initial study to determine whether to prepare one of the following:

    • Environmental Impact Report (EIR): Includes in-depth studies of potential impacts, how to reduce or avoid these impacts, and a breakdown of alternatives to the project.

    • Negative Declaration: The local government issues a negative declaration if they determine the project has no potential for significant environmental impact.

  5. The local government notifies the public opening the process up for litigation.


How long does it take to make your way through the CEQA gauntlet?

Probably quite a bit longer than you thought. This timeframe is variable and unpredictable but guaranteed to be protracted and stressful. The local agency is supposed to review the application within 30 days, issue negative declarations issued within 180 days, and issue EIRs within 1 year. The reality is: the CEQA process could take a year or more and that’s if everything goes well each step of the way.

Meanwhile, local cities and counties are coming around to the idea of cannabis businesses.

The next 15 cities in California to allow cannabis retail include:

Licensing-One-Pager FINAL.png

  • Costa Mesa

  • Guadalupe

  • Daly City

  • Encinitas

  • Madera

  • National City

  • Pittsburg

  • Merced

  • Ventura

  • Sonora

  • Brisbane

  • Seaside

  • Vernon

  • Arvin

  • Oceanside

There is an unprecedented amount of opportunities in the cannabis industry in California. Scores of new cannabis markets are opening up driven by local government budget shortfalls, the economic benefits other local jurisdictions have enjoyed, and the overall lifting of stigma against cannabis operators and users.

While local jurisdictions have tried to push cannabis businesses into less attractive industrial zones in the past, these new opportunities are popping up right on Main Street! The cannabis industry in California is absolutely exploding. Don’t miss your chance or gamble that you can handle the licensing process all on your own. Engage with licensing professionals like RMCC to do it right the first time and start your business out with compliant operational workflows from Day 1.

Join the growing number of cannabis entrepreneurs RMCC has assisted in their licensing journey. Complete the Pre-Licensure Package Opt-in Form, reach out to info@rmcc.io for more information, visit rmcc.io and training.rmcc.io, and check out the Compliance Marketplace. 

Looking for a licensing consultation? Book time with Lindsey Kincade, RMCC’s Chief Compliance Officer.

 
Lindsey Kincade