California is investing $ 100 million in the state’s ailing legal cannabis industry

First of all, the money will help move temporary licenses into permanent ones.

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June 18, 2021 2 min reading time

This story originally appeared on Benzinga

A new measure proposed by Governor Gavin Newsom was approved by California lawmakers on Monday and is designed to help legal cannabis operators acquire permanent licenses.

According to the Newsom office, as of April 2021, around 82% of the state’s legal operators still hold provisional licenses. These interim licenses are due on January 1, 2022.

Related: California gives $ 15 million to cannabis social equity program participants

Dealing with the bottleneck

While adult cannabis was legalized in the Golden State in 2016, most breeders, retailers, and manufacturers were unable to switch from temporary licenses to permanent licenses that need to be renewed annually.

According to a report in the Los Ageles Times, this is due to the high cost of auditing to comply with environmental regulations.

Los Angeles Mayor Eric Garcetti said the money was “essential to supporting a well-regulated, equitable and sustainable cannabis market”.

Cannabis companies could use the money that comes in the form of grants to hire professionals who can help them conduct the environmental studies required to convert their temporary licenses to perpetual licenses.

However, some in California’s industry say the funding is nowhere near enough to resolve the systemic problem it aims to address: the state’s protracted bottleneck in approving annual business permits.

Related: Where Can I Find Funding For A Cannabis Business

Reforms are needed

Jerred Kiloh, president of the LA-based United Cannabis Business Association, said he would prefer the Newsom administration to focus on reforming the licensing process itself rather than throwing money into an existing problem, MJBizDaily reported.

Kiloh noted that the $ 100 million will only go to cities and counties that have already approved legal cannabis programs.

The funds will initially be allocated to 17 eligible cities and districts, with LA receiving 22% of the amount.

In addition, Governor Newsom is pushing for a six-month extension of the preliminary licenses from January to June 2022, which has yet to be approved.

Meanwhile, California remains the largest cannabis industry in the world, with sales of nearly $ 3 billion in 2019 alone.

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