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California cannabis farmers markets? New bill would make it possible

by Travis C | Apr 29, 2022 | Blog, Business, Cannabis Business, Cannabis Law and Compliance, Cannabis News, Culture, Industry News, Legalization

California cannabis farmers markets could become a thing

It is not secret that small cannabis farms in California have had a rough few years. A new bill aims to help them out.

A new bill introduced into the Assembly Business and Professions Committee on Tuesday (4/26/22) would allow small scale cannabis farmers to sell their products at farmers markets in California. Introduced by Assembly member Jim Wood, he has seen the issues that small cannabis operations have dealt with and wants to give them a hand.

“It is no secret that cannabis businesses throughout the state are struggling, whether it’s taxes, compliance costs, competing with the illicit market or other challenges, but the focus of AB 2691 is to help legal cannabis farmers who grow less than 1 acre of cannabis get consumer recognition for their unique products, much as has been done for craft beer, artisanal wine and other family farm agricultural products. Giving these smaller farmers opportunities at locally approved events to expose the public to their products increases consumer choice and offers farmers a better chance to reach retail shelves which is their ultimate goal. This is not about circumventing retailers, but growing the industry overall. My office has always been open to those who may have concerns about this bill and I’m here to listen to their concerns and their proposed solutions.”

The Origins Council, a cannabis advocacy organization that represents historic, rural, cannabis-producing regions across California has expressed their support for the bill. Genine Coleman and the group’s 900 or so members have fought consistently for the rights and protections of small, local farms that have been in operation in the state for decades.

“The vast majority of them are producing half an acre or less of cannabis, so this is definitely a huge potential opportunity for our membership,” Coleman said. “For small-scale producers to have direct marketing and sales opportunities with consumers is really critical.”

However not everybody is on board with the new arrangement. The Executive Director of the Davis Farmers Market Alliance, Randi MacNear, says what she oversees is a “food business”. Even if the new bill passes, she says it is unlikely anything will change at their market.

“We really are interested in selling food, so at this point, cannabis is not a food,” MacNear said. “We’re trying to increase our local farmers. We’re trying to get new, emerging Yolo County farmers in here and give them a space to sell, so I think that probably we would stick with that concentration.”

MacNear did add that the decision ultimately comes down to the Davis City Council.

“I’m sure you’ll see some of this product at other markets but not here in Davis,” MacNear said.

Assembly Bill 2691 is now headed to the Assembly Appropriations Committee, where it must pass before entering the full Assembly followed by the Senate. If approved by all of the above, the bill goes to the governor’s desk for signing.

Supporters argue that the main purpose of this bill is to help small farmers who don’t have the same access channels to consumers as larger competition have the opportunity to grow their customer base and their brand at the local level.

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.

California cannabis companies warn of being at ‘breaking point’

by The Real Dirt | Dec 20, 2021 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Industry News, Legalization, Politics

California cannabis companies are struggling to operate under the state's strict regulations and high taxes

California’s cannabis industry is at a “breaking point.”

That’s the warning coming from 27 people who represent growing operations, dispensaries, retail outlets and industry organizations who want Gov. Gavin Newsom and state lawmakers to reduce taxes on cannabis.

The group issued an open letter to state lawmakers Friday and posted a petition on Change.org, which as of Monday morning had more than 750 signatures.

“It is critical to recognize that an unwillingness to effectively legislate, implement, and oversee a functional regulated cannabis industry has brought us to our knees,” the letter said, noting that the industry’s past reform pleas have failed. “We have collectively reached a point of intolerable tension, and we will no longer support a system that perpetuates a failed and regressive War on Drugs.”

The group issued its warning more than five years after California voters approved Proposition 64, allowing for the legal growth and sale of marijuana and other cannabis products for recreational use. Such sales began statewide on Jan. 1, 2018.

What the industry wants is a tax break, a lifting of the cultivation tax that growers have to pay as well as a three-year break from excise taxes. It also wants to see more retail shops open up throughout California; the state allows local municipalities to decide whether to allow for local sales.

“Excessive taxation, which compounds across the supply chain, makes our product 50% more expensive at retail than the illicit market. This has created an illicit market that is currently three times the size of the legal market,” the letter said.

The current framework is “rigged for all to fail,” the letter said.

“We need you to understand that we have been pushed to a breaking point and we will not remain on our knees. We will not stand for political interests to the detriment of our own livelihoods, the health of our citizens, the prosperity of our families and the state of California’s economy,” it said.

Newsom’s office issued a statement in response to the industry’s plea, saying that the governor sees the need for cannabis tax reform as well as other changes.

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Humboldt County announces more than $2 million in grant funding for cannabis farmers

by The Real Dirt | Aug 17, 2021 | 420 Culture & Travel, 420 News, Blog, Business, Cannabis Business, Cannabis News, Growing, Industry News, Legalization, Politics

humboldt county gives out cannabis grant to farmers

Many Humboldt County growers are struggling this season as the price of cannabis falls in California.

Humboldt County announced more than $2 million in grant funding available through Project Trellis, the county’s cannabis micro-grant, marketing and local equity program, to help the local cannabis community enter into the commercial cannabis marketplace. Those eligible can apply for up to $10,000 “per service” in accordance with Humboldt County’s eligibility requirements for Project Trellis.

“All applications and supporting documents will be reviewed by Economic Development staff to ensure the applicant meets eligibility criteria. Some projects may receive a lower amount than what was requested, based on the availability of funds or needs of service,” a news release from the county stated.

“A typical approval process can take 60 or more days from when the application is received. Upon approval, the applicant will receive a notice of award, contract, fund request form and a W9 form.”

Project Trellis was built as a three-tier program to redirect cannabis tax revenue back into the local economy. In September 2019, the county sought proposals for cannabis branding and marketing.

The goal of the program is to “implement the recommendations set forth in the Humboldt County Cannabis Equity Assessment” and “to further equity among those impacted by the criminalization of cannabis, by providing services to individuals in Humboldt County’s cannabis community, particularly small growers who were adversely affected by the criminalization of cannabis.”

While $2 million may seem like a big chunk of change, Humboldt County Growers Alliance executive director Natalynne DeLapp said the county’s “independent cannabis farmers are in crisis.”

“It is great that the county developed Project Trellis…and (has) secured nearly $5 million in funding from the state to support communities most impacted by the War on Drugs in entering the regulated cannabis market, but now it is time to get serious,” she said. “…Perhaps 200 of Humboldt County’s 900-plus cultivation operators, who can prove the War on Drugs has negatively impacted them, could receive up to $10,000 in fee waivers for professional services like fee waivers, technical assistance or installing solar or water storage systems.”

Read Full Story on Times Standard

California offers $100 million to rescue struggling legal marijuana industry

by The Real Dirt | Jun 15, 2021 | 420 News, Blog, Business, Cannabis News, Growing, Industry News, Legalization

California legal marijuana industry is getting $100 million from government for support

SACRAMENTO — The California Legislature on Monday approved a $100-million plan to bolster California’s legal marijuana industry, which continues to struggle to compete with the large illicit pot market nearly five years after voters approved sales for recreational use.

Los Angeles will be the biggest beneficiary of the money, which was proposed by Gov. Gavin Newsom to be provided as grants to cities and counties to help cannabis businesses transition from provisional to regular licenses.

“California voters approved Proposition 64 five years ago and entrusted the Legislature with creating a legal, well-regulated cannabis market,” said Assemblyman Phil Ting (D-San Francisco), the chairman of the Assembly Budget Committee. “We have yet to reach that goal.”

Many legal marijuana growers, retailers and manufacturers have struggled to make the transition from a provisional, temporary license to a permanent one renewed on an annual basis — a process that requires a costly, complicated and time-consuming review of the negative environmental effects involved in a business and a plan for reducing those harms.

As a result, about 82% of the state’s cannabis licensees still held provisional licenses as of April, according to the governor’s office.

The funds, including $22 million earmarked for L.A., would help cities hire experts and staff to assist legal marijuana businesses in completing the environmental studies and transitioning the licenses to “help legitimate businesses succeed,” Ting said.

The grant program is endorsed by Los Angeles Mayor Eric Garcetti, who said in a letter to legislators that the money is “essential in supporting a well-regulated, equitable, and sustainable cannabis market.”

Separately, the governor wants to give legal marijuana businesses a six-month extension beyond a Jan. 1 deadline to transition from provisional licenses by complying with mandates of the California Environmental Quality Act. That extension, which faces opposition for delaying promised environmental safeguards, was not included in the state budget bill approved Monday and is still being negotiated with lawmakers.

The governor’s proposal to extend provisional licenses has drawn objections from a coalition of seven environmental groups including Sierra Club California, Defenders of Wildlife and the Nature Conservancy.

They said in a letter to Newsom that the proposal allowing the extension of provisional licenses and interim alternatives to CEQA rules goes against what voters were promised and is “wholly inadequate to protect local communities and the environment.”