California Cannabis: The Race is On for Temporary State Licenses
Unless you’ve been completely out of the loop, you already know that many, many people are in a race to submit their California state temporary cannabis license applications before December 31 of this year, which represents the “drop dead” date for cannabis temporary licenses. Add to that the regulatory curve balls thrown by the California Department of Food and Agriculture (CDFA) and the California Department of Public Health (CDPH) at the end of October (those agencies moved up the their temp licensing submission deadlines to December 1) and you have a stampede of people now trying to get their temporary license applications in by the end of this month. Thankfully, the Bureau of Cannabis Control (BCC) hasn’t yet said that there’s a low chance of successful processing if you submit after December 1, but given the back and forth it takes with the BCC to even get the temp, you may be out of luck.
Why does all of this matter? If you don’t have, or haven’t held, a temporary license for your current cannabis location (which is good for 120 days and gets renewed for additional 90 day periods so long as you’ve applied for your annual cannabis license), you’re ineligible for a provisional license next year, which means you’ll be on ice and non-operational unless and until you get your state annual license. No one really knows how long that will ultimately take.
If you’re finding yourself scrambling to get a temp license in before December 1, you’re not alone. The biggest roadblock of all has been would-be licensees securing local approval from their cities or counties. Certain local governments, though (like Long Beach, the City of Los Angeles, and San Diego) are obliging folks in their local licensing processes by providing them with letters of authorization. These letters of authorization only allow the applicant to go and apply for their state temp license(s)–they do not allow an applicant to actually open their doors until all conditions of official local approval have been met. That’s only half the battle though. Then you have to complete and submit your state temporary license applications, which depending on agency, is no picnic.
All three agencies will ask that you submit proof of local approval from your local government when applying for the temp license. They then contact the local government to verify local approval and the local government has no less than ten days to respond. By far though, CDPH has the simplest and easiest temporary license application. It’s literally one page, and you email or mail it to the agency. And you don’t have to submit even a lease agreement or a premises diagram either. Contrast that though with the BCC and the CDFA, which are a little more intense– especially since the re-adoption of the emergency regulations, which tweaked the temporary license submission requirements for those agencies.
(1) The legal business name of the applicant; (2) The email address of the applicant’s business and the telephone number for the premises; (3) The business’ federal employer identification number; (4) A description of the business organizational structure of the applicant, such as partnership or corporation; (5) The commercial cannabis license that the applicant is applying for, and whether the applicant is requesting that the license be designated as medicinal, adult-use, or both; (6) The contact information for the applicant’s designated primary contact person including the name, title, phone number, and email address of the individual; (7) For each “owner” of the business, the owner’s name, title, percentage of ownership, mailing address, telephone number, and email address if applicable; (8) The physical address of the premises to be licensed; (9) Evidence that the applicant has the legal right to occupy and use the proposed location (that meets all mandatory buffer requirements); (10) A detailed premises diagram; (11) A copy of a valid license, permit, or other authorization issued by a local jurisdiction, that enables the applicant to conduct commercial cannabis activity at the location requested for the temporary license; and (12) a penalty of perjury statement.
(1) The license type for which the applicant is applying and whether the application is for an M-license or A-license (note that CDFA still forces people to apply separately for M and A licenses even though those license type designations have since been combined); (2) If the applicant has already submitted an application for annual licensure, the application number; (3) The legal business name of the applicant entity; (4) The full legal name, mailing address, phone number, email address, and affiliation of the “designated responsible party,” who must: (A) Be an owner with legal authority to bind the applicant entity; (B) Serve as agent for service of process; and (C) Serve as primary contact for the application; (5) The physical address of the premises; (6) Copy of local approval; (7) A proposed cultivation plan; (8) Identification of all the following water sources for the cultivation site (as applicable): (A) A retail water supplier; (B) A groundwater well; (C) A rainwater catchment system; (D) A diversion from a waterbody or an underground stream flowing in a known and definite channel; and (9) Evidence of enrollment with the applicable Regional Water Quality Control Board or State Water Resources Control Board for water quality protection programs or written verification from the appropriate board that enrollment is not necessary.
Where are most people going to get screwed up here? Without a doubt, with the BCC it is the premises diagram and the proof of “right to real property” (I.e., your lease agreement). With CDFA, it’s going to be the cultivation plan, identifying water sources, and proof or registration or exemption with the applicable water boards. And many people don’t realize that the cultivation plan, itself, demands the inclusion of a detailed premises diagram, lighting diagram, pest management plan (for which you better have a good amount of knowledge regarding lawful and illegal pesticides and their applications), and waste management plan. All of this is not an insignificant amount of information to compile.
While folks are in the race now to get that initial (and very important) temporary license, there will be another push for these folks prior to the expiration of that 120-day validity period on the temp license where provisional licensing also requires that you have submitted a complete annual license application to the state, which will be another massive information gathering expedition about your cannabis business and how it operates. Undoubtedly, many would-be licensees are going to be out of the game if they don’t get their temps in on time, so stay tuned with updates as the California cannabis regulatory world turns.