The Busy Bee of Weed – Gavin Newsom’s California Comeback Plan to Help the Cannabis Industry

california cannabis industry

California’s governor Gavin Newsom is taking a page from Joe Biden’s playbook and stepping up to the plate to help the citizens of his state with what has been dubbed his ‘California Comeback Plan’ which will start cash payments to millions of state residents and their families.

But what many don’t know is that as a part of his plan the cannabis industry is going to feel an ease of pain as well. Cannabis dispensaries and services were deemed essential services early on during the pandemic. The cannabis industry is a viable and needed service for many who depend on this medicine for relief of pain and other disorders.

Including the cannabis industry in his relief plan is an acknowledgement of its importance and necessity to the people of this state and a statement that this industry is as mandatory as any other.

“California Gov. Gavin Newsom announced Friday his new state budget proposal – called the California Comeback Plan – will include $100 million to alleviate a bureaucratic logjam that has left thousands of marijuana companies with so-called “provisional” business licenses in danger of shuttering at least temporarily.”

“To give marijuana growers, retailers and other companies breathing room, Newsom also plans to introduce a trailer bill to allow regulators to issue provisional cannabis business permits for an added six months, until June 30, 2022.”

This “logjam” has been a growing problem for some time with provisional licences which at some point need to be converted to a more permanent “annual” licence.  But redtape has delayed this process for years jammed up by environmental and local ordinances. “And state regulators lack the power to extend the provisional licences past December 31.”

“As of March, there were a total of 9,950 active cannabis licenses, and roughly 83% of those – or 8,280 – were operating on provisional licenses versus the annual permits.”

“As a result, more than 80% of the state’s marijuana business licenses could be in jeopardy of closing in 2022 – at least temporarily – unless the provisional licensing issue is resolved.”

The 100 million dollars will be distributed to help local officials of cities and counties process the backlog of provisional licences awaiting approval for the mandatory annual permit.

“According to the Newsom administration, the money would be divided among “jurisdictions with high numbers of provisional licenses across the supply chain” in order to deliver the biggest impact for the industry.”

Part of the problem in getting the provisional licences approved to mandatory annual permits is the California Environmental Quality Act.

“The California Environmental Quality Act (CEQA) is a law that requires state and local government agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.”

“Before the city and state can issue a commercial cannabis permit, they have to figure out if issuing the permit will harm the environment and decide what steps they can take to protect mother nature from a newly permitted commercial cannabis business.”

Basically the state wants to make sure the cannabis enterprise won’t F up the environment or kill or some endangered species. However it has proved time consuming for businesses to comply with and officials to process applications with all the ‘i’s dotted and ‘t’s crossed.

“This grant funding aims to serve local governments and a significant portion of the provisional license population, including a number of small businesses and equity operators,” Nicole Elliott, the governor’s senior adviser on cannabis, said in a statement.

“We are committed to maintaining stability across the cannabis supply chain, supporting our local partners, and transitioning provisional licenses into annual licensure more swiftly, without sacrificing California’s environmental commitments.”

The 100 million dollars according to Newsom’s proposal will be split among 3 classifications of local government with “the amount of grant money received by each city or county broken down by the “proportionate share of their entire provisional license population”:

“The top eight jurisdictions that are home to the most provisionally licensed cultivation permits as of May 5 would receive 25% of the funds.”

“The top eight jurisdictions with the most provisionally licensed manufacturers, distributors, testing labs, microbusinesses and retailers as of May 5 would receive another 25% of the funds.”

“The third category would receive 50% of the funds, and the money would go to any of the top eight jurisdictions with the most provisionally licensed businesses that have received state grant money to support social equity programs.”

“The move coincides with the consolidation of the state’s three marijuana regulatory agencies into a single new oversight bureaucracy, the Department of Cannabis Control (DCC). That agency is slated to launch July 1 and will oversee the dispersal and use of the grant monies.”

Local governments must comply with conditions for provisional licences as set forth by the Department of Cannabis Control.

“The local governments will be required to use the $100 million in grant money for processing marijuana business licenses, technical support for license applicants, mitigation measures related to environmental control – particularly water conservation – or “other uses that further the intent of the program as determined by the (DCC),” a Newsom administration official wrote in an email to MJBizDaily.”

“This distribution method will result in over 60% of provisional licensees and the cities and counties that permit them being served by these grant dollars,” the email continued.”

“The provisional licensing extension also comes with conditions.

Under the terms of the trailer bill, California marijuana regulators must still:

  • Ensure that cannabis businesses are complying with certain environmental rules.
  • Specify for companies what type of progress they must make toward an annual permit in order to keep their provisional licenses active.
  • Remove the provisional expiration date of June 30, 2022, as long as “the applicant is making measurable progress toward achieving annual licensure.”

The cities and counties likely to receive grant money are: 

  • Adelanto
  • Commerce
  • Desert Hot Springs
  • Humboldt County
  • Lake County
  • Long Beach
  • Los Angeles
  • Mendocino County
  • Monterey County
  • Nevada County
  • Oakland
  • Sacramento
  • San Diego
  • San Francisco
  • Santa Rosa
  • Sonoma County
  • Trinity County

The proposal also includes the hiring of a “state deputy director of equity and inclusion as part of the DCC staff” who will be charged with “assessing and developing best practices and work programs that achieve social equity.” Lastly the proposal is focused on including cannabis into a broader sustainable agricultural program within the State Department of Food and Agriculture with a suggested “9 million dollar budget for a three-year pilot program”.

Regarding social equity on May 18 a coalition of social equity advocates from across the states gathered together to deliver a message to Governor Newsom and the state legislature: “Help victims of the war on drugs get into the legal cannabis industry or face a court fight”.

These advocates asserted: “that local governments and the state have fallen short in attempts to right the wrongs done to minority communities by the war on drugs and called upon lawmakers and the governor to address the issue”.

In that spirit they are pushing for two bills currently before the legislature:

  • Senate Bill 603, which would help offset marijuana business license fees for qualified social equity applicants.
  • Senate Bill 398, which would establish a new oversight committee to watch how state social equity grants are used.”

They also feel that the state budget is “racist”.

“The social equity advocates also issued a statement blasting Newsom’s recent state budget proposal as “racist.””

“They pointed out that the governor’s California Comeback Plan calls for $126 million in funding for “police enforcement against traditional cannabis operations,” which the advocates claim “dwarfs” the $15.5 million Newsom’s proposal set aside for social equity programs.”

The advocates are hoping that  hoping “California will set aside an additional $50 million for social equity through the state budget process this year, including:

  • $30 million for direct financial assistance to social equity applicants.
  • $20 million to fund local social equity programs.”

The money is there. Let’s hope so!

Author: Sherri Margolin (Dark Matters)

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