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Licensing Woes Could Spell Doom for California’s Cannabis Market

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As in so many other areas of culture and life, many Americans concerned with or interested in the legalization of cannabis were looking to California to show them the way. Sure other states legalized recreational weed first, but everyone expected a lot of glitches and growing pains in those states. They expected California to get it right. They were wrong.

Some journalists are pointing to the current licensing crisis as a blunder that could lead to the end of California’s cannabis commerce sector altogether, but that seems a bit alarmist and short-sighted. Still, the danger for many growers and businesses in the Golden State is very real, and if lawmakers don’t act quickly, many businesses could see a loss in production that could drive them under.

At least one California lawmaker, however, has been paying attention, and he’s not about to let the equivalent of a modern-day gold rush slip through his state’s fingers. Democratic State Senator Mike McGuire (District 2) is fighting back with legislation that he hopes will curtail the licensing crisis.

The crisis in question, McGuire describes as such “…thousands of cannabis farmers, in particular, who did the right thing and applied for a state license after the passage of Prop 64… did the right thing, but their temporary license is about to expire.” The expiration of those temporary licenses without a permanent license to replace it could force many farmers to close doors permanently or run the risk of losing their good standing with the state by operating in the black market once again.

This is because those thousands of businesses are operating on licenses that are set to expire this month, next month, and some have already expired. And even though McGuire’s bill is expected to pass, it could take until May to get a vote. Leaving a period of up to two months in which growers on temporary licenses will be forced to either cease operations or continue operating, but without a license – a move that could potentially hurt their chances at ever being licensed again.

At best, this could lead to supply shortages, at worst, a serious recession of the California cannabis economy. And some businesses – especially the smaller farms affected by the licensing situation – have already been run out of business by it.

While McGuire and his team are scrambling, the community of growers at large in the Napa Valley region  haven’t done a whole lot to prepare themselves for the coming storm. Many have stated that even if their licenses lapse, they plan to continue doing business and let the law sort itself out. There has been talk of filing a lawsuit against the state, but the idea doesn’t appear to have much steam at the moment.

The bill McGuire proposed, will keep those businesses affected by the legal lapse and mandate that state agencies efficiently keep up with license processing. There may be other ways to prevent any kind of widespread licensing lapse, but as of now, it is unclear what that will be.

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