California localities detail plans to spend $100 million to fix marijuana licensing logjam

Image of a California flag amid U.S. dollars

California’s Department of Cannabis Control has started to disperse $100 million to 17 municipalities and counties to help them transition thousands of marijuana businesses holding temporary licenses over to annual permits.

The funding is intended to alleviate a bureaucratic logjam that has left thousands of marijuana companies with temporary, or so-called “provisional,” business licenses.

As a result, some provisionally licensed companies are in danger of shuttering, at least temporarily.

Local officials said they plan to use the $100 million to assist cannabis companies on a variety of fronts, including:

  • Providing direct grants to businesses to help them through the transition process.
  • Hiring staff and contractors to process more applications.
  • Helping applicants meet environmental compliance under the California Environmental Quality Act (CEQA). In many cases, CEQA compliance is costly and the approval process can take years.

Nearly three-quarters of marijuana business licenses in California are provisional.

Companies must transition to annual licenses by Jan. 1, 2026.

The provisional license program itself will phase out over time, with the first deadlines set for March 31.

The 10 cities and seven counties receiving the $100 million account for 5,290 of the provisional licenses, or roughly 60%, of the California bottleneck of 8,874 temporary permits, according to an MJBizDaily analysis of state data.

 MJBizDaily contacted each of the 17 municipalities and counties to learn how they intend to use the funds.

The grants, which must be deployed by March 31, 2025, include about $47 million in funding specifically earmarked for equity applicants, programs and assistance.

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Here’s how the jurisdictions break down:

Adelanto

Grant: $972,696

Provisional licenses: 108

Annual licenses: 41

Use of grant/business benefits:

  • Improve cannabis entitlement, inspection, licensing and help companies comply with the CEQA.

Commerce

Grant: $416,319

Provisional licenses: 14

Annual licenses: 1

Use of grant/business benefits:

  • Hire staff and provide more resources for cannabis operators.

Desert Hot Springs

Grant: $822,160

Provisional licenses: 74

Annual licenses: 39

Use of grant/business benefits:

  • Hire consultants to process applications, assist applicants and improve cannabis databases.

Notable: The city received the funds in January.

“The next steps will be to draft a request for proposals seeking consultants, then selection of consultants.” – Doria Wilms, deputy city manager

Humboldt County

Grant: $18.6 million

Equity funding: $10.7 million

Provisional licenses: 1,094

Annual licenses: 801

Use of grant/business benefits:

  • Conduct a hydrologic assessment to identify local groundwater supplies.
  • Provide matching grants to increase water storage and conservation.

Notable: The hydrologic assessment of water use by cultivators will play a key role in environmental policy.

Lake County

Grant: $2.1 million

Equity funding: $1.2 million

Provisional licenses: 863

Annual licenses: 180

Use of grant/business benefits:

  • Hire consultants to process cannabis permits, reviews and analysis.
  • Give priority to reviewing equity applicants.

“The influx of cannabis-related applications has been overwhelming for our already understaffed county departments.” – County spokesperson

Long Beach

Grant: $3.9 million

Equity funding: $2.1 million

Provisional licenses: 137

Annual licenses: 39

Use of grant/business benefits:

  • Hire staff/consultants to process applications and assist equity applicants.
  • Provide direct grants and technical assistance to equity applicants.

Notable: Some funding is earmarked for overtime and rehiring retired firefighters to conduct property inspections and other activities.

Los Angeles

Grant: $22.3 million

Equity funding: $12.4 million

Provisional licenses: 594 (394 general; 200 social equity)

Annual licenses: 0

Use of grant/business benefits:

  • Hire more than 20 staffers and consultants to expand and improve services.
  • Create a new position dedicated to outreach, engagement and assisting social equity applicants.

Notable: The city’s Department of Cannabis Regulation (DCR) also oversees 1,270 temporary licenses. Businesses must have temporary and provisional license to operate in L.A.

“DCR currently anticipates beginning to use grant funding in the first half of 2022.” – DCR spokesperson

Mendocino County

Grant: $17.5 million

Equity funding: $10.4 million

Provisional licenses: 867

Annual licenses: 31

Use of grant/business benefits:

  • More than $10 million is dedicated to direct grants, with priority given to equity applicants.
  • Recruit contract planners to process applications and CEQA checklists.

Notable: The county plans to start using funds this quarter but is unlikely to release direct grant applications “until July.” – Kristin Nevedal, cannabis program director

Monterey County

Grant: $1.7 million

Provisional licenses: 87

Annual licenses: 7

Use of grant/business benefits:

  • Initiate CEQA analysis and hire consultants/staff to process planning and building permits, implement cannabis equity program and manage grant funding.
  • Amend land-use regulations and provide direct funding to licensees.

Notable: “Staff has identified 100 current and prospective businesses that may benefit from grant funds.” – Joann Iwamoto, program manager

Nevada County

Grant: $1.2 million

Provisional licenses:139

Annual licenses: 41

Use of grant/business benefits:

  • Assist applicants in overcoming environmental barriers to permitting and application requirements.
  • Provide technical support and consulting.

Oakland

Grant: $9.9 million

Equity funding: $5.5 million

Provisional licenses: 329

Annual licenses: 90

Use of grant/business benefits:

  • Provide more support to equity applicants and licensees, including capital, technical and legal assistance.
  • Add staff and technology for application reviews.

Notable: “Our office anticipates presenting a resolution to Oakland’s City Council in March to approve receipt of these funds.” – Greg Minor, assistant to the city administrator

Sacramento

Grant: $5.7 million

Equity funding: $3.2 million

Provisional licenses: 191

Annual licenses: 66

Use of grant/business benefits:

  • Hire contractors to create an online portal and mapping tools and improve application tracking.
  • Hire consultants to streamline permitting requirements.

Notable: The City Council approved the grant award Jan. 18.

“This grant funding will help to ensure that local businesses and applicants receive their annual licenses ahead of the state deadlines.” – Tim Swanson, spokesperson

San Diego

Grant: $764,261

Provisional licenses: 57

Annual licenses: 18

Use of grant/business benefits:

  • Fund equipment for the new program as well as web development and an automated application tracking system.
  • Fund training and outreach for licensees and future equity applicants.

Notable: “The city anticipates using the funds before June 30.” – Travis Cleveland, development project manager

San Francisco

Grant: $3 million

Equity funding: $1.7 million

Provisional licenses: 96

Annual licenses: 37

Use of grant/business benefits:

  • Hire permit analysts to process applications and improve efficiency.
  • Prioritize equity applicants and provide them with technical support.

Santa Rosa

Grant: $775,841

Provisional licenses: 94

Annual licenses: 44

Use of grant/business benefits:

  • Create staff position to oversee ordinance changes and hire a senior planner and consultants for website development and IT.
  • Revamp reporting and application tracking methods.

Notable: The grant program is slated to begin in March. Some funding is dedicated to updating cannabis ordinances. The city currently doesn’t have any employees dedicated to handling cannabis-related business issues.

Sonoma County

Grant: $1.1 million

Provisional licenses: 224

Annual licenses: 57

Use of grant/business benefits:

  • Address permit application backlogs and improve the conditional-use permitting (CUP) process.
  • Increase staff and resources for permit application reviews and CUP applications.

Notable: “Since the county began accepting use permit applications for cannabis operations in July 2017, Permit Sonoma has received over 160 use permit applications. Of these, over 50 are still in process.” – McCall Miller, county cannabis ombudsperson

Trinity County

Grant: $3.2 million

Provisional licenses: 322

Annual licenses: 104

Use of grant/business benefits:

  • Expedite cannabis licensure, land-use permits, inspections and environmental compliance.
  • Hire staff/consultants to increase capacity and improve technical support.

Chris Casacchia can be reached at ccasacchia@hotmail.com.