California expands grant funding to establish more local cannabis retail

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California regulators are expanding grant access and funding for cities and counties to establish adult-use retail cannabis programs.

The Department of Cannabis Control expanded eligibility for Phase II of its Local Jurisdiction Retail Access Grants to any jurisdiction without a retail program, including those that didn’t participate in Phase I.

Phase II grant funding, which is contingent on the issuance of retail licenses, also has been doubled so jurisdictions may receive $150,000 per eligible retailer license and $300,000 per eligible social equity retailer license, according to a recent news release.

The qualifications for Phase II eligibility include:

  • The absence of a cannabis retail licensing program before July 1, 2022.
  • A plan to develop and implement a cannabis retail licensing program.
  • The issuance of one or more cannabis retail licenses in that jurisdiction.

In Phase II, the state will award $15 million in Local Jurisdiction Retail Access Grants, which have been billed as the first of its kind in the United States.

The first application window will be open Oct. 1-31.

The second application window opens March 1, 2024.

“Because local jurisdictions can begin applying for Phase II awards for issuing retail licenses on October 1, 2023, towns and counties have an incentive to rapidly develop their programs,” DCC spokesperson David Hafner told MJBizDaily via email.

For Phase I, the DCC in June awarded $4.1 million in grants to 18 cities and counties, including:

  • Riverside, $475,000.
  • Los Angeles County, $475,000.
  • Huntington Beach, $325,000.
  • Buena Park, $315,000.

Part of Phase I funding was provided up front to help local jurisdictions implement and establish a retail program, according to Hafner.

The rest of the proceeds, including equity bonus funding, are disbursed after the jurisdiction submits proof that they have established a retail license program or equity program for retail licenses.

More than 300 cities and counties could be eligible to apply for Phase II funding under the expanded criteria.

That’s because wide swaths of the state are still marijuana deserts nearly six years after California established adult-use sales in 2018.

According to the latest state data, 61% of cities and counties prohibit retail cannabis and 56% ban any type of cannabis business.

“There are still many locations throughout the state where cannabis usage is notable, but existing consumers do not have convenient access to legal retail cannabis,” DCC Director Nicole Elliott said in a statement.

“We know that cannabis consumers often make purchasing choices based on convenience, so sufficient access to legal retail reinforces extremely important consumer safeguards.”

Orange County, the state’s third-most-populous county with nearly 3.2 million residents, is a prime example of a California locality lacking marijuana retail.

Only a few Orange County cities allow retail operations, including Phase I grant recipients Buena Park and Huntington Beach, though a marijuana store has to yet open in either jurisdiction.

Phase II funding will be disbursed after a city or county submits proof to the DCC of issuing licenses.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.