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California budget deal helps keep marijuana growers in business

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California cannabis farmers facing a potential “extinction event” could see help in the state budget package with measures that would allow nascent businesses to continue operating with provisional licenses and open opportunities for new growers.

The fixes would give the state and local governments more time to decide whether to grant annual licenses to marijuana businesses that obtained temporary ones after voters passed Proposition 64 in 2016 to legalize recreational cannabis.

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Thousands of companies were at risk this year of having their temporary licenses expire before the state or local governments could act on them, throwing uncertainty in an industry the state wants to draw out of the black market.

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The state budget deal would grant a five-year extension for the state’s provisional licensing structure, moving its expiration date date from Jan. 1, 2020, to Jan. 1, 2025.

The marijuana budget bill clarifies how companies can obtain licenses, allowing businesses to apply for provisional licenses that can be renewed without first obtaining a less-secure temporary one.

The budget package would also give local cannabis ordinances a two-year exemption from the state’s main environmental protection law, the California Environmental Quality Act.

“That’s really a big win for not just cultivators but all licensees,” said Jacqueline McGowan, a lobbyist whose firm, K Street Consulting, represents the cannabis industry in Sacramento.

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The Legislature on Thursday passed its primary budget bill, a $214.8 billion spending package. The marijuana measures are contained in a budget trailer bill that the Legislature can vote on in coming days and adopt as policy with the state budget.

Legal cannabis growers this year were losing their businesses this year as a result of state law prohibiting renewals of temporary licenses, which are held by thousands of growers and retailers. McGowan has called this mass-expiration a potential “extinction event” for legal marijuana in the Golden State.

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