Sacramento Plans to Use State Funding to Help Cannabis Businesses Navigate Licensing Process
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Sacramento Plans to Use State Funding to Help Cannabis Businesses Navigate Licensing Process

A $5.7-million grant from California’s Department of Cannabis Control will allow the city’s Office of Cannabis Management to hire experts to help business owners transition from provisional to annual licenses.

January 19, 2022

Roughly 70% of California’s cannabis businesses currently hold provisional licenses ahead of a June 30 deadline to secure annual licenses through the state.

That’s why the Sacramento Office of Cannabis Management plans to use a $5.7-million grant from California’s Department of Cannabis Control to hire experts to help business owners transition from provisional to annual licenses, according to Davina Smith, the office’s manager.

When California launched legal adult-use cannabis sales on Jan. 1, 2018, the state allowed cannabis businesses to operate under provisional licenses, which have since been renewed on an annual basis, to give businesses time to work through the necessary requirements to get a more permanent annual license.

“Now, it’s become a situation where the provisional licenses need to end on the state level, and they want to only issue annual licenses,” Smith said. “They’re looking at how they can resolve these issues, and they’ve enlisted the help of local jurisdictions that permit cannabis … to assist them in that. So, Sacramento got a grant, as well as a number of other cities and counties across the state that license cannabis.”

The Office of Cannabis Management is Sacramento’s regulatory body that issues local cannabis permits and takes enforcement action on the permits, such as revocation or denial. The office also creates policies to govern the local cannabis industry, as well as operates a social equity program, called the CORE program, which aims to support minority-owned businesses.

“Basically, we try to be an advocate … within our regulatory government body for the cannabis industry here in Sacramento,” Smith said.

Last summer, California approved $100 million in grant funding to help support the state’s cannabis industry, which is still struggling to thrive five years after voters approved Proposition 64 to legalize an adult-use market in the state.

RELATED: California Stakeholders Weigh in on Legislature’s $100-Million Cannabis Plan

Smith said each business has different needs when it comes to meeting the state requirements to get an annual license.

The $100 million in grant funding aims to help cities and counties assist cannabis businesses in completing time-consuming and complicated environmental studies around the impacts of their operations and how they can reduce potential harms—a required step toward securing a more formal annual license, which is mandated in the California Environmental Quality Act (CEQA).

RELATED: How Does the California Environmental Quality Act Impact Cannabis Cultivators?

“I think for some of the businesses, it’s just going to be a matter of … a little bit of a change in paperwork,” she said. “For other businesses, there are some environmental issues that we need to work with them on. And as we all know, in California especially, environmental issues can be costly. That’s why the funding is, I think, very helpful to help deal with some of these issues.”

The Office of Cannabis Management plans to put out a request for proposals (RFP) to hire experts who can assist businesses with the various aspects of the licensing process, such as securing a water permit or drafting an Environmental Impact Review (EIR).

“We’re also cognizant of the fact that there might be areas we have not considered,” Smith said. “We think we’ve really got a comprehensive list of expert areas that we need, but we want to make sure if there’s an area that we’re missing, that we have some flexibility to do a small contract here or there for those specific needs.”

Smith would like to hire locally but said she is not opposed to soliciting the help of experts from across the state, as long as the Office of Cannabis Management is able to ultimately provide the best services and expertise for Sacramento’s cannabis businesses.

The RFP will be available soon on the office’s website, and Smith said once the experts are in place to provide their services to businesses, it’s up to Sacramento’s cannabis industry to reach out for help.

“I think for a lot of this, it’s really just getting our businesses to really engage,” she said. “I think there are a lot of people who are concerned about this. I know I’ve been contacted by them.”

Overall, Smith said she is looking forward to providing this support to Sacramento’s cannabis businesses, and she is optimistic that many will be excited to work with the office as they navigate the licensing process.

“That’s really our goal, is to just put it to the forefront of our businesses’ view and their priority list and really work with them,” Smith said. “If it’s just a paperwork issue, let’s resolve it. Let’s get it done. If it’s something more significant and substantial, better to get started on it early rather than wait. … We’d hate for any businesses to be shut down by the state when they don’t have to be. Our businesses, they have challenges and they’re suffering, and the support we can give them is important.”

“We have a really good crowd of businesses here in Sacramento,” she added. “We’ve done good work with them. Our equity community is growing every day, and we’re really proud about that and helping them to get where they need to be has just been really exciting this past year. I think … we’re in a really good place and it’s an exciting time to be working in this industry."