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Only 1 in 4 California cannabis companies have a permanent business license

State will give 17 cities and counties grants to help license cannabis businesses. But many say bigger problems remain.

Nearly four years after California started regulating its cannabis industry, three in four businesses still operate on provisional licenses.

As temporary license holders, 75% of the state’s cannabis industry lacks protections and privileges that come with holding full licenses — a situation that worries some in the business. Those temporary operators also haven’t passed extensive environmental reviews required of full licensing — a fact that concerns environmental groups.

Cannabis licensing is slow for a number of reasons, ranging from the sometimes dizzying complexity of California’s environmental rules to conflicting language between state and local cannabis laws to the high costs for permits and a shortage of government workers needed to process the paperwork.

The weed licensing glitch also isn’t new. For several years, state legislators have extended the permitting process so that thousands of businesses don’t become unlicensed overnight.

But now, California is pushing to change the situation. The state has set aside $100 million to help 17 cities and counties transition their cannabis businesses from temporary to full licensees. Los Angeles is eligible for $22.3 million of that money, while five other Southern California cities — Long Beach, San Diego, Commerce, Adelanto and Desert Hot Springs — are in the running for a combined $6.9 million. Applications are due by Nov. 15.

Eligible cities say they’ll use the money to hire staff and, in some cases, to offer direct support to businesses. They’re confident that over the next few months they can make a significant dent in the problem.

“I know it will help,” said Edgar Cisneros, city manager for Commerce, which has seven fully licensed cannabis businesses and 12 others waiting to get through the process.

“There is a real need for staff and also consultants…  to get these permits to permanent licensing at a much faster pace.”

Still, while business owners and others applaud the one-time state funding, they say it doesn’t go far enough. Many cities and counties remain left out of the applicant pool, and there is no statewide plan to ease the business hurdles that caused the backlog in the first place.

 

“No amount of money is going to change the significant amount of time it takes to come up to speed for local approval,” said Hilary Bricken, a cannabis industry attorney out of Los Angeles who said some businesses have failed during the multi-year wait to get licensed.

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