Newsom Proposes $100 Million Grant to Help with Marijuana Licensing

newsome proposal for California comeback plan

Governor Gavin Newsom recently announced the California Comeback Plan, a new state proposal that includes $100 million to support businesses with provisional business licenses.

Marijuana cultivators, retailers, and other cannabusinesses currently operate under these provisional licenses. But bureaucratic issues had these operations in danger of closing down temporarily. The governor is also planning to introduce a trailer bill that will give regulators the option to issue provisional cannabusiness permits for an additional six months, extending the provisional licenses until June 30, 2022.

These two actions aim to handle the issue attached to provisional licensure, which will need to be converted to a more permanent annual license solution.

However, this process has been delayed. Between red tape, complicated environmental regulations, and various local industry ordinances, it’s taken a while to achieve a more permanent solution.

With this in mind, over 80 percent of Cali’s cannabis business licenses are at risk in 2022. This could cause these operations to shut down temporarily if the governor does not resolve the provisional licensing issue.

At this point, state regulators do not have the legal power to offer extensions for provisional licenses after December 31.

With this $100 million grant, cities and counties will receive funding that will aid local officials in processing the provisional licenses that have been waiting on approval, allowing these operations to secure the mandatory annual permit they need to continue without issue.

The Newsome administration claims that this money will be allocated among “jurisdictions with high numbers of provisional licenses across the supply chain,” which they remain hopeful will deliver a much-needed positive impact on the sector.

By March of this year, the state had 9,950 active cannabis licenses, with approximately 83 percent operating using provisional licenses. The remaining 18 percent have annual permits.

The main thing causing the delays for these companies transferring to annual permits is the California Environmental Quality Act (CEQA). CEQA has made the compliance process time-consuming, which has directly impacted the speed at which city and county authorities can process applications while ensuring all requirements have been fulfilled.

“This grant funding aims to serve local governments and a significant portion of the provisional license population, including a number of small businesses and equity operators,” Nicole Elliott, the governor’s senior adviser on cannabis, explained in a statement.

“We are committed to maintaining stability across the cannabis supply chain, supporting our local partners, and transitioning provisional licenses into annual licensure more swiftly, without sacrificing California’s environmental commitments.”

The $100 million dollars will be allocated towards three categories of local governments:

  • 25% will go to the top eight jurisdictions with the most provisionally licensed cultivation permits
  • 25% will go to the top eight jurisdictions that have the most provisionally licensed manufacturers, testing labs, microbusinesses, retailers, and distributors.
  • 50% will go to the top eight jurisdictions that have the most provisionally licensed businesses that have been given state grant money to support social equity programs.

The Newsome administration claims that the sum of money each city or county will receive will be in accordance with the “proportionate share of their entire provisional license population.

Louis Levey is the Content Success Manager and Founder at No Strings Content. He's passionate about helping cannabis businesses use content to attract, educate, and convert audiences. His hometown is Boca Raton, Florida, but he currently lives and works remotely in Chiang Mai, Thailand.

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