Is $ 100,000,000 enough to rejuvenate California’s legal cannabis industry?

When cannabis is legalized in one state, users, investors and industry enthusiasts will be excited because it is a step towards global legalization. But does it all end with legalization? After cannabis legalization in one state, is the industry on its own?

Of course not! Legalization is only the first step because after that, the cannabis business sector will flourish. California in particular has a vibrant cannabis industry, and like all other business sectors, it should be rejuvenated.

California is taking the bold step by offering a revamp of its cannabis industry by assisting marijuana companies with their new environmental auditing requirements.

California is now offering $ 100 million to save its L.no matter Cannabis industry

California lawmakers have approved a $ 100 million plan to boost its legal marijuana industry, which may have struggled to compete with the black market. Los Angeles will be the biggest beneficiary of the funds allocated to help cannabis companies transition from temporary to regular licenses.

The bill was proposed by California Governor Gavin Newsom, who claims the funds will be grants to cities and counties with legal marijuana businesses.

Congregation Budgets Committee chairman Rep. Phil Ting said California has not yet reached its well-regulated cannabis market. He claims that the $ 100 million grant this overhaul will bring California closer to its goal.

The challenge with the California cannabis market

Several cannabis growers, enthusiasts, manufacturers, and investors have often struggled to switch from the temporary temporary license to a permanent (annual) one.

The process is costly, complicated, and time consuming as it requires a review of the negative environmental impact associated with the cannabis business. The California government wants to reduce such damage, but since the cost is too high for the companies, it is setting up this grant to make the process easier.

Prior to the establishment of the scholarship, 82% of California cannabis companies held tentative licenses. The grant will provide Los Angeles with $ 22 million to help the city hire experts and staff to help such companies conduct their environmental audits.

Once the evaluation is complete, legitimate companies have a higher chance of succeeding and overwhelming the black market. The governor would also like to give cannabis companies a six-month extension period to transition temporary licenses.

Companies must comply with the California Environmental Quality Act. The governor’s extension was heavily criticized, but was primarily seen as an opportunity for companies to obtain the right license in record time.

California’s long history of cannabis legalization and the need for rejuvenation

Among the other states, California is known as the leading state in legalizing cannabis. With Proposition 64 in 2016, the state paved the way for other states to license their cannabis market. State officials initially assumed that 6,000 cannabis stores would be licensed in the first few years.

However, only 1,086 retail stores and delivery companies have obtained licenses. In 2019, industry officials also estimated that there were up to three times as many unlicensed companies as those with government approval. This means that more licensed stores are still needed, so the numbers are more impressive.

Some cannabis industry leaders believe that enforcement has reduced the number of illegal cannabis stores, which is commendable, but the number of unlicensed retailers still outnumber those with licenses.

Invoice details

The bill was approved on Monday, June 14, 2021, with $ 100 million earmarked for the project. It also targets 17 cities and counties, including Los Angeles, that receive grants. Los Angeles is the largest city that receives most of the funding. Other eligible cities for assistance are San Francisco, Oakland, Long Beach, Adelanto, Commerce, and Desert Hot Springs.

Originally, pot companies had to move from temporary licenses to regular annual permits by 2019. But several new companies were unable to comply with this in time, so the state had to approve “provisional” licenses by January 1, 2020. The governor of California again extended the deadline to January 1, 2022.

Performing a CEQA review is a critical requirement for moving from the provisional to the new license. The bill calls for this review to show how cannabis farms and other cannabis businesses are impacting the environment, from plants to wildlife, water and air.

The companies should then suggest ways in which they can reduce such risks to the environment. Despite the viability of the idea and the state’s intent to protect the environment, many cannabis environments fail to meet the deadline.

Some companies are only just beginning to set up their business and deal with personnel issues. Senator Anna Caballero proposed another bill that would allow the state to offer provisional licenses for six years through 2028. She later put this bill on hold after it was rejected by environmental groups.

The environmental groups insisted that the six-year extension did not provide sufficient ecological protection. To avoid a dispute between such groups and lawmakers, the governor proposed a six-month extension that would allow companies to use the temporary license.

The governor warns that the cannabis industry could have dire consequences if not given enough time to obtain the regular license. Legislators have accepted this alternative from the governor, giving cannabis companies the time it takes to meet annual regulatory requirements while protecting the environment.

Bottom line

California has always resulted in a boost to the cannabis industry: other states are turning to California for legal guidance. Hence, this latest move to support the cannabis business with a $ 100 million grant will fuel the licensing process that other states may be emulating.

Legalization is never enough in the cannabis industry as there are still illegal and black market pot shops to deal with. States need to be proactive to ensure their cannabis businesses are protected, empowered, and given all the support they need to be successful.

No state in America benefits from a thriving illegal and black cannabis market. With this overhaul, the state of California is poised to crush its illegal cannabis market to allow legal companies to compete cheaply in the market.

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