California’s cannabis growers are almost entirely operating on temporary permits that are about to expire, which would create a huge cannabis shortage resulting in nearly zero supply by summer, Leafly reports.
California’s Department of Food and Agriculture (CDFA) has issued nearly 7,000 temporary licenses that make up most of the state’s current cannabis production. These licenses, however, are expiring rapidly. Since the state’s adult-use cannabis rules took effect last year, the CDFA has issued only 9 permanent cannabis farm licenses, with 39 more pending.
Given the current situation, it’s unlikely that the CDFA would be able to issue enough permanent licenses to meet market demand before the 7,000 temporary licenses expire.
“If California runs out of regulated cannabis, consumers will turn to the unregulated market, making it even more difficult for the few remaining licensed cannabis businesses to eke out a living.” — Omar Figueroa, cannabis attorney and industry expert, via Leafly
In February, state Sen. Mike McGuire (D) introduced Senate Bill 67, which would give lawmakers and regulators more time to issue the necessary permanent licenses, in an effort to get a quick fix in place and prevent a complete industry stoppage.
If SB 67 isn’t passed, all temporary licenses will have expired by July; by that point, however, the CDFA only expects to have issued 144 permanent licenses.
“SB 67 isn’t the solution to all of this, but it is critical if the fledgling market is going to survive the next year,” said Hezekiah Allen, former Director of the California Grower’s Association.
Licenses are already expiring and the dismantling of California cannabis will only accelerate: 194 licenses are set to expire in February, 1,496 will expire in March, and 4,001 will expire in April.
A hearing for SB 67 is scheduled for February 27.
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