California’s cannabis industry is staring down a cliff as the state’s temporary permits begin to expire this year, prompting a bill that would extend all temporary licenses to Dec. 31.
North Coast state Sen. Mike McGuire, the author of Senate Bill 67, says the Legislature must act fast in passing the extension if it wants to avoid collapsing the legal cannabis market.
“This bill is going to protect thousands of cannabis farmers who did the right thing and applied for a state license,” McGuire said.
There are just under 7,000 temporary licenses being vetted and processed by the state Department of Food and Agriculture, McGuire said. All of them will expire at some point this year.
While each temporary permit currently has an expiration date tied to it, the ultimate expiration date for all temporary permits is Dec. 31. At the start of 2020, not only will all temporary licenses be invalid, but the state will stop granting them altogether.
Temporary licenses are intended to shepherd cannabis farmers who existed before the legal era into full compliance without compromising their revenue. After Dec. 31, any new person wanting to obtain a license won’t legally be able to run their cannabis business until they’re fully compliant.
But the problem for thousands of existing growers is a lengthy, costly process standing in the way of compliance, as well as a significant backlog of permit applications still being processed.
The bill is making fast progress through the Legislature with bipartisan support, McGuire noted, but California is still facing a crisis with its burgeoning pot industry. In the month of March alone, he said, 1,000 temporary permits are set to expire, while the growers who hold them wait for permanent license approvals that may still be many months away.
“This is the worst way to transition a multi-billion dollar agricultural market which employs tens of thousands of Californians,” he said.
For Humboldt County cannabis growers, the bill is an “absolute must,” said Thomas Mulder of Humboldt Redwood Healing.
“Technically, the law is you can’t operate when the license expires,” Mulder said. “When the permits expire, (the growers) will be faced with the risk of, ‘Do I break the law to put food on the table?’”
Growers in counties that don’t impose localized cannabis taxes or tracking systems might actually want to stay in temporary-license limbo, Mulder said. With little enforcement in certain other counties, some growers might opt to ride out the revenues on temporary licenses.
But in Humboldt County, there are “way more” farmers trying to be compliant, Mulder said. And for good reason: The county’s high standards make it easier for farmers to pass state environmental quality regulations, he said.
Temporary permits are different from provisional licenses, the latter being a second nonpermanent system the state introduced in late 2018 as a stopgap for fast-expiring temporary permits.
The distinction gets complicated — it’s difficult to explain without resorting to “drawing pictures,” said Terra Carver, executive director of the Humboldt County Growers Alliance. But neither a temporary permit nor a provisional one is equivalent to being in the clear.
And if the permits expire before McGuire’s bill is passed, it will be a “mission critical” moment for the industry, she said.
“We appreciate the senator’s work on the issue,” she said. “He’s been a champion.”
Shomik Mukherjee can be reached at 707-441-0504.