Senate Bill 67 Proposes to Bridge State Licensing Gap

The State’s statutory authority to issue or renew temporary cannabis licenses, which are valid for 120 days, ended on December 31, 2018. Meanwhile, the inability of State agencies to process the backlog of provisional or annual license applications prior to the expiration of thousands of temporary licenses statewide has left a growing majority of cannabis operators without a valid state license and with no path to become legally compliant until their provisional or annual licenses can be issued, which could take several more months.

Despite cannabis operators having followed the rigorous steps laid out to them by licensing authorities and having acted in good faith to meet all licensing requirements, if their temporary licenses expire, they are left with no means to continue operating legally. This may result in many operators turning to the illicit market, one of the core issues the Medical and Adult-Use Cannabis Regulation and Safety Act was intended to address. 

The significant number of provisional or annual applications pending with licensing authorities before temporary licenses expire or before provisional licenses can be issued threatens to create a major disruption in the commercial cannabis marketplace. Senate Bill 67, introduced by Senator McGuire as an urgency statute, seeks to alleviate the immediate danger confronting the cannabis industry by authorizing the revalidation of an expired temporary license if the licensee submitted an application for an annual or provisional state license before the licensee’s temporary license expiration date. SB 67 made it through the Business and Professions Committee, and has been referred to the Senate Appropriations Committee. The next hearing has not been scheduled, however, under the best-case scenario, the bill will make it through all policy committees and off the floor of the Senate and Assembly in April-May.

Although the timeline for passing SB 67 would not help those whose licenses have already expired or are expected to expire this spring, the bill’s proposal to “revalidate an expired temporary license” could allow those who had to stop legal operations to restart once SB 67 has passed. Senator McGuire has stated that “he hopes enforcement against businesses operating in good faith will be put on hold until SB 67 can make it through the Legislature, and that licenses can be updated retroactively, so law-abiding companies aren’t unduly penalized.”

Based on these statements from Senator McGuire and direction from the Sonoma County Cannabis Ad Hoc Committee, Sonoma County will not be enforcing on applicants compliant with the local Penalty Relief Program whose temporary state licenses have expired while awaiting issuance of a provisional state license.