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Provisional cannabis licenses in California coming to an end

by Travis C | Jan 28, 2022 | 420 News, Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Culture, Industry News, Legalization, Politics

provincial cannabis licenses in California news

Thousands of business have been put on a timeline as provisional cannabis licenses in California will be coming to and end in the future.

The end to a longstanding program in the state is going to make entry into the California legal cannabis industry much more difficult for newcomers. However the end to the temporary permit program will impact thousands of legal cannabis businesses across the state.

In fact, this change will impact the majority of California cannabis businesses.

Beginning June 30th, the options for entering the cannabis industry in California will become more limited. Potential newcomers will have two options:

Obtain an annual state license
Buy an existing licensed company

But obtaining an annual state license in California right now can take months or even years before a new business could begin operations, not to mention the costs of obtaining said license. Buying an existing cannabis company that is already licensed will be a much speedier process, though likely even more costly.

This could mean an increase in merger and acquisition activity in the state. While the end to the provisional cannabis licenses in California is meant to help existing cannabis businesses in the state, it may be too soon to say.

Of the 12,221 marijuana businesses that are currently licensed in California, only 3,378 currently hold annual state licenses. In other words, over 70% of legal cannabis businesses in California are operating with a provisional license.

Compared to annual licenses, provisional cannabis licenses in California have been much easier to obtain. Provisional licenses have acted as an extension of temporary permits that were issued following the passing of Proposition 64. These temporary licenses were originally intended to allow already licensed medical cannabis businesses in the state to sell cannabis recreationally while the state set up the regulated industry.

That was in 2018.

In 2022, the majority of the industry is still operating under provisional licenses for a variety of reasons. However most would likely argue that the costs of obtaining an annual license alone is reason enough.

As it stands, current provisional license holders don’t need to worry. However those looking to apply for a new provisional cannabis license in California will have their first deadline March 31, 2022. These will specifically be license applications for mixed light and indoor cultivation at or less than 22,000 square feet of contiguous premises and outdoor cultivation at or less than 20,000 square feet of contiguous premises.

June 30, 2022 is when the California Department of Cannabis Control is when these licenses must be issued. Starting July 1st, renewing a provisional cannabis license in California will become more difficult, requiring specific conditions. However local equity applicants and smaller cultivations will still be able to apply for provisional cannabis licenses in California through 2023.

January 1, 2026 is the last day that any provisional cannabis licenses can be in effect. In other words, all current provisional cannabis license holders — 70% of current businesses in California — have until this date to obtain an annual state license.

Four years may seem like ample time for the 8,843 provisional license holders in California to make the switch to an annual license. However since Proposition 64 passed, California has been plagued with suffocating bureaucracy, exorbitant fees and costs, strict regulations and other issues that already make it extremely difficult to operate for smaller operations.

The state has allocated $100 million to help the 17 cities and counties with the most marijuana companies to finish transitioning provisionally licensed companies into annual permits. However the annual licensing process is so involved, said attorney Ariana Van Alstine, that some companies have taken years to get theirs. Others are still waiting for their licenses, going back-and-forth with local or state regulators on getting theirs completed or both.

With a priority on transitioning existing provisional cannabis licenses in California, one must hope that the process will run smoothly. Ideally, every provisional license holder will be able to make the switch to an annual license before January 1, 2026.

However if California’s past is to act as any reference, one must also be extremely skeptical.

Massachusetts cannabis tax revenue surpasses Alcohol

by The Real Dirt | Jan 27, 2022 | Blog, Business, Cannabis Business, Cannabis News, Culture, Industry News, Legalization

If there’s any doubt about weed’s popularity, just hit the road — billboards are seemingly everywhere advertising recreational marijuana stores. The numbers back it up, too.

Since adult-use retailers opened in Massachusetts in November 2018, gross total sales have now reached $2.54 billion, according to data from the Cannabis Control Commission.

While tax data shows alcohol consumption is hardly plummeting, the meteoric rise in cannabis use speaks to changing attitudes about recreational alcohol and marijuana use.

“I think that people are looking for an alternative to make them feel better,” said Mikayla Bell, community outreach manager for NETA, one of the largest cannabis retailers in the state. “Oftentimes people are turning to alcohol for relief. And now they found another product with without the hangover, without the calories.”

Bell said the general public is becoming more comfortable with the idea of recreational marijuana, even if they’re not using it themselves.

Data obtained by 5 Investigates reveals plenty of people are consuming it. Take excise taxes, which are levied on both alcohol and marijuana.

Alcohol excise taxes have increased slightly in the past five fiscal years. Halfway through the current fiscal year, Massachusetts has collected $51.3 million so far in alcohol excise taxes.

For the first time, marijuana excise taxes have exceeded alcohol’s. At the same midway point this fiscal year, the state has collected $74.2 million as December 2021.

Read Full Story on WCVB 5

Bill filed in Tennessee to regulate and tax CBD and Delta 8 THC

by The Real Dirt | Jan 14, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Culture, Hemp, Hemp Law, Industry News

Tennessee might regulate and tax CBD and Delta 8 THC products

A Republican lawmaker is seeking to tax and regulate the existing cannabis industry in the state.

Rep. Chris Hurt (R-Halls) filed House Bill 1690 this week. The bill seeks to regulate psychotropic hemp-derived cannabinoids, which include products that have more than 0.1 percent THC. (Current federal regulations limit THC to 0.3 percent.) That includes products containing the newly popular Delta-8 THC but not pure CBD products, which do not contain THC.

As a member of the Agriculture and Natural Resources Committee, a former hemp farmer and current co-owner of CBD ProCare — a CBD company in Dyersburg — Hurt says he filed the bill in an effort to “legitimize the industry.”

According to Hurt and Joe Kirkpatrick of the Tennessee Growers Coalition, who collaborated with Hurt on the writing of the bill, no other state has legislation that specifically taxes and limits the sale of hemp-derived cannabidiol products.

“People think that Tennessee is the last to do anything when it comes to the hemp industry,” Kirkpatrick says, “but they are forgetting that Tennessee was the first state to allow and define smokable hemp and the first state to allow the feeding of hemp to livestock.”

HB1690 would do three things: create a licensing requirement for retailers and wholesalers, establish a 6.6-percent excise tax on the wholesale of hemp-derived cannabinoids and limit sale of psychotropic hemp-derived products like Delta-8 to those 21 and older.

The bill would require retailers and wholesalers to apply for an annual $200 license through the Tennessee Department of Agriculture. Based on the licensing structure outlined, Kirkpatrick says he would expect the state to collect $160,000 annually in fees. (The legislative Fiscal Review Committee has not yet analyzed the potential economic impact of the legislation.) Licenses could be revoked or suspended at the discretion of the Department of Agriculture.

Kirkpatrick estimates that the proposed 6.6 percent tax, modeled after the tax on tobacco, could generate as much as $4-5 million in annual revenue for the state. Hurt and Kirkpatrick would like to see the money collected from licensing and the wholesale tax used to increase the resources at the Department of Agriculture to ensure product safety.

Read Full Story on Nashville Scene

Cannabis tax revenue surpasses $10 billion in legal states

by The Real Dirt | Jan 10, 2022 | Blog, Business, Cannabis Business, Cannabis News, Culture, Industry News, Legalization

cannabis tax revenue surpassed $10 billion

Sales taxes collected by states with legal cannabis programs totaled $10.4 billion as of December since the adult use market launched in 2014 in Colorado and Washington State, according to a study by The Marijuana Policy Project.

A report released Thursday by the pro-industry group said the $10.4 billion figure includes more than $3 billion in sales tax reported in 2021, thus far.

“States that have legalized cannabis for adults are reaping significant economic benefits,” said Karen O’Keefe, director of state policies at the Marijuana Policy Project.

The tax revenue helps fund education, school construction, early literacy, public libraries, behavioral health, alcohol and drug treatment, veterans’ services, conservation, job training, conviction expungement expenses, and community reinvestment.

“In many instances that revenue is being distributed to much needed public services and programs, including reinvesting in communities that were devastated by the war on drugs,” O’Keefe said. “This is in stark contrast to [cannabis] prohibition, which costs taxpayers billions of dollars each year to enforce.”

Some examples include $471.9 million toward improving the public education system in Colorado and more than $100 million in California for community and non profit groups that help people impacted by drug laws.

In Illinois, cannabis tax revenue has outpaced revenue from liquor taxes. According to data from the state, adult use cannabis generated about $193 million in tax revenue from July through the end of November, compared to about $141.3 million over the same period for liquor sales taxes, which include levies on beer, wine and spirits.

Read Full Story on MSN

Everything to know about Connecticut cannabis license options

by Travis C | Jan 7, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Industry News, Legalization, Politics

After a meeting of the Connecticut Social Equity Council (SEC) in the first week of January, regulators have announced that the Connecticut cannabis license process will begin in February.

The legislation which legalized cannabis in the state has a condition in its copy that the Connecticut cannabis license process could not start until the SEC approved a technical assistance plan for the cannabis industry. The approved plan will include outreach and providing resources to people interested in participating in the legal cannabis market.

Connecticut’s Department of Consumer Protection (DCP) announced on Twitter that they will begin accepting applications for certain adult-use cannabis establishment licenses in 30 days. The DCP also will announce the specific number of Connecticut cannabis licenses will be available for each establishment type.

Each cannabis license type will be released for applicants at different times. This time frame is planned for February to the final week of March, and will operate under two lottery systems.

The first lottery will be specifically for social equity applicants, who will have first access to applications on February 3rd. To be a social equity applicant there must be at least 65% ownership or control of the business by individuals who “meet the income and residency requirements for a social equity applicant outlined in the law,” DCP said in a press release.

Individuals who fall under the “Disproportionately Impacted Areas” category have the option to pay $3 million and skip the lottery system altogether.

The other Connecticut cannabis license lottery is for general applicants. These license types include retailers, micro-cultivators, delivery services, transporters and more. From February 3 to March 24 there will be a 90-day application period with each license being released at a different period throughout the process.

Connecticut cannabis license types and application dates

The DCP released every Connecticut cannabis license type and how many applications will be available for the general and social equity lotteries. Here are the various types and how many licenses will be released.

Disproportionately Impacted Area Cultivator: February 3, 2022 (non-lottery)

Retailer: February 3

6 general licenses, 6 social equity licenses

Micro-cultivator: February 10

2 general licenses, 5 social equity licenses

Delivery Service: February 17

5 general licenses, 5 social equity licenses

Hybrid Retailer: February 24

2 general licenses, 2 social equity licenses

Food and Beverage: March 3

5 general licenses, 5 social equity licenses

Product Manufacturer: March 10

3 general licenses, 3 social equity licenses

Product Packager: March 17

3 general licenses, 3 social equity licenses

Transporter: March 24

2 general licenses, 2 social equity licenses

In a DCP press release, Commissioner Michelle Seagull said, “This work by the Social Equity Council is a critical step in the licensure process for the emerging Adult-Use cannabis market in Connecticut and will be instrumental in ensuring the equity goals established in the law are met.”

Seagull explained that the initial number of available Connecticut cannabis licenses is not meant to be a cap, but,”a starting point for opening the adult-use cannabis market in an effective, measured and thoughtful way,” she said.

Despite legalization, California black market still thriving

by The Real Dirt | Jan 5, 2022 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Culture, Industry News, Legalization, Politics

Lake County has some of the largest acreages in permitted cannabis grows in California. Yet, despite a legal market, illegal grows are unfairly undermining the profitability of lawful cultivators.

This illegal market that voters sought to eradicate with cannabis legalization is quickly eroding the permitted industry and threatening public safety. Amounting to an estimated 80% of all cannabis sales in California, the market is saturated with low-cost illicit product. Cannabis cultivators are unable to compete.

As the underground economy thrives, so does criminal activity and environmental harm.

Rural counties with land and industry prime for cannabis cultivation are at the front lines of this battle, including those in the Sacramento region. During a time of limited staffing and competing priorities, local governments require increased state funding for enforcement.

The path for the legal industry is already challenging. Growers face a long permit process, including extensive state-mandated environmental review and higher taxes intended to help monitor and ensure public health and safety.

Distribution is also affected by the struggles of the state’s licensed retail outlets, which must compete with illegal retailers that similarly flourish due to limited enforcement resources.

Unencumbered by these obstacles, illicit growers and suppliers can sell product at half the cost and distribute them nationally. The negative impact to residents and the environment from this activity is significant.

A 2020 raid on illegal cannabis grows in Lake County resulted in the seizure of over 51,000 plants and the discovery of 40 state Fish and Wildlife violations. This included storage of chemical pollutants near waterways and usage of underage labor. Stories like these are echoed across the state, with illegal grows linked to violent crime, environmental damage and wildfire.