Cannabis State Licensing Update

Effective January 1, 2019, the State's statutory authority to issue or renew a temporary cannabis license expired. Instead, Senate Bill 1459, signed into law on September 27, 2018, allows for the issuance of provisional licenses, which are intended to bridge the gap between temporary and annual licenses. The State's authority to issue provisional licenses remains in effect until January 1, 2020.

A provisional license is valid for 12 months and acts in the same manner as an annual license, except it is not renewable. To be considered for a provisional license, applicants must have or have held a temporary license for the same operation, must be compliant with all local policies and regulations, and must demonstrate that California Environmental Quality Act (CEQA) review is underway. For those who meet these requirements, an annual cultivation license application must be submitted. Upon review of the annual license application, the applicant will be notified by the State if they qualify for a provisional or an annual license; qualification for an annual license is largely based on whether a project is determined to be compliant with the CEQA. To transition from a temporary license to a provisional license, the annual license application must be for the exact same site and activity (for example, any flowering type to any flowering type, nursery to nursery, processor to processor).

Once a provisional license has been issued, the licensee must comply with all licensing requirements, including: 1) pay all applicable application and license fees; 2) adhere to all California Cannabis Track-and-Trace requirements; and 3) submit an annual cannabis cultivation application—and receive approval for an annual license—prior to the expiration of the provisional license, if the licensee wants to continue to operate after the provisional license has expired; this last requirement is particularly important for those operating under Sonoma County's Penalty Relief Program.

While you need to have—or have had at one time—a temporary license to qualify for a provisional license, you can apply for an annual license regardless of whether you have ever had a temporary license. However, as noted above, issuance of an annual license does require CEQA review and approval. In other words, in order to qualify for an annual license with the State, local project approval must first be obtained.

For additional details about temporary, provisional, and annual commercial cannabis cultivation licenses, please contact the CalCannabis Cultivation Licensing Division at 833-225-4769 or send an email to: calcannabis@cdfa.ca.gov. You can also visit the CalCannabis website for step-by-step guides and videos on the state’s cultivation licensing application process, including information on the Track-and-Trace system.