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October 11, 2018, California
Notwithstanding the measure of blanket legalization, the Golden State has always been a thriving and extensive marijuana market. Before legalization, the wide-scale cannabis operations of California were comprised of legal MMJ industry and the black market, which had earned a legendary reputation among pot-lovers all across the country. The groundbreaking ballot initiative Proposition 64 didn’t just legalize cannabis, but it has also laid out a regulatory and taxation outline to draw the illegal cannabis market into the legal ambit.
The gravity of some tasks is only realized in the middle of their execution. Regulation of cannabis operations has turned out to be such a tall order. It’s been more than nine months since the blanket legalization of cannabis and regulators haven’t issued a single permanent commercial license. All cannabis businesses keep on operating on provisional licensing. In order to maintain the supply chain of legal cannabis operations, Gov. Jerry Brown has ratified yet another bill for issuing a new batch of provisional licenses. Experts think that the ratification of the bill is much needed at the moment in order to keep the state’s marijuana industry moving.
Industry experts have noted that the regulators are trying their best to keep up with the extraordinary demand for licenses with limited resources. However, the provisions set in Proposition 64 are putting stumbling blocks in the progression. The cannabis legislation gives communities an opportunity for active participation to set the direction of the industry. This entails that every license applicant must get a local approval from the respective government. Instead of easing things out, this tiered approval process has turned out to be an impediment in the provision of cannabis licenses.
Some city councils are hesitant in giving the approval. Then there are some that are willing to accommodate cannabis operations, but they are overwhelmed with a huge backlog. The involvement of local administrations has put state regulators into a dilemma. If they approve the licenses without getting a local administration in the loop, then they can be accused of putting substandard and non-compliant evaluation process in place.
In contrast, if they just delay the issuance of permanent licenses, then there is a huge risk that many aspirants would retreat to the illicit cannabis market. This rock and hard place leave the regulators with only one option i.e. to continue to issue temporary permits to the businesses while dealing with the overwhelming work of the review process.
With the promulgation of blanket legalization, the state regulators issued provisional licenses with four-month validity. In April, these temporary licenses were extended by 90 days. However, regulators were not ready even after the expiration of this cut-off date. After assessing the on the ground situation, the state has finally decided to extend this provisional period for entire 2019.
As of now, more than 6,000 businesses in the state are operating on provisional licenses. And it will definitely take considerable time for regulators to approve permanent licenses for all those thousands of businesses.