Five years have gone by since California passed prop 64 legalizing cannabis for adult use, and now the state is ready to invest in the industry that has seen massive growth since then. With $100 million in grant funding, California is set to make a big impact on the industry and cannabis businesses. The aim of this effort is to tighten the regulatory landscape and boost business prospects for entrepreneurs, as well as local governments, that entered the market over the past few years.
The state’s cannabis-specific grant allocation is a line item in the state’s $268-billion 2021-2022 budget, in what has been dubbed the “California Comeback” plan.
Grant Funding Allocation
$22 million of these funds have been earmarked for Los Angeles programs alone. 16 other cities and counties, including San Francisco, Long Beach, Oakland, and Desert Hot Springs will also receive a portion of the funding. The idea, according to state legislators, was to targets areas with the highest concentrations of licensed cannabis businesses and consumers—areas where a return on this public investment might be realized more quickly.
“Gov. Newsom is dedicated to the success of the legal cannabis industry in California,” stated the governor’s senior advisor on cannabis, Nicole Elliott. “The purpose of this one-time $100 million in grant funding is to aid locals and provisional licensees, many of which are small businesses, legacy operators and equity applicants, in more expeditiously migrating to annual licensure.”
Proposed Licensing Changes to Help Cannabis Businesses
As an indication of how operations are going in California, Newsom is also suggesting a six-month extension on the mandate to move all businesses from temporary licenses to more formal annual licenses. That change was originally meant to happen in 2019, but the deadline has since been pushed back twice, now to January. 1, 2022. Newsom’s administration is hoping to bump this transition to mid-2022 now.
The Los Angeles Timesreported that Newsom believes the extra six months is critical to ensure struggling cannabis businesses are able to get their operations and accounting in order to meet the more stringent requirements, most of which are environmental regulations. As of today, 82% of cannabis businesses in California still hold a provisional license.