Provisional License Offers Lifeline to California Cannabis Operators

Oct 03, 2018

Governor Jerry Brown recently signed a bill that allows thousands of cannabis operators surviving on expiring temporary licenses to stay open for an additional year without new approval from local authorities.

Brown signed Senate Bill 1459 amid a flurry of legislation on September 27. The bill addresses a problem faced by much of the California commercial cannabis industry: the state cannot issue licenses to operators who have completed state applications until the relevant city or county provides approval, but that local approval has been very slow to come.

In response to the slow local process, the state provided applicants with the option of operating on a 120-day temporary license (and three 90-day extensions) until they were issued a standard state license. The state required some form local authorization to issue the temporary license, but not a finalized local permit. However, the temporary license program was only meant to be a short-term fix and is scheduled to expire on December 31, 2018. After that, a cannabis business could only operate if it obtained a standard license. Yet, many local governments are still moving at a snail’s pace.

Making matters worse, some local jurisdictions announced that they would not provide applicants with local approval for their standard state license unless the applicant had obtained a finalized local permit. In one example, The City of Oakland sent applicants a letter in April refusing to provide local approval for a standard (non-temporary) state license until the applicant had obtained a city permit. Meanwhile, permit-seekers who had filed complete applications more than six months prior were still awaiting inspections from Oakland’s Building and Fire departments, placing applicants in a Catch-22.
Recognizing the protracted delays at the local level, AB 1459 wrests some control from the hands of city and county agencies and gives the state “sole discretion” to decide whether to issue the new a 12-month “provisional” license. The state does not plan to hand out provisional licenses casually however, and has included its own criteria that applicants must meet. In order to be eligible for the provisional license, applicants must have met the following list of conditions:

  • Submitted a completed a standard (non-temp) state license application
  • Filed and signed a provisional license application under penalty of perjury
  • Held or currently holding a temporary license
  • Provided evidence that compliance with the California Environmental Quality Act is underway

The bill represents a lifeline for the vast majority of cannabis permit applicants in counties and cities facing long permitting backlogs that have occurred by no fault of their own.

In Oakland, hundreds of applicants are awaiting sign-off from the City’s Building and Fire Departments before their final permits can be issued. The departments’ staffs have been overwhelmed by the volume of applications and the new complexities that cannabis infrastructure presents.

John Oram, CEO of Oakland-based Bloom Innovations, which owns the popular NUG brand said, “99.9 percent of Oakland cannabis businesses would have had to shut down” while waiting for their local permit to be issued had the Governor not signed SB 1459.

“If the bill had not passed The City of Oakland could have chosen to deny local authorization, which would have forced us to close,” Oram said.


Ethics Committee Blocks Judges From Joining California Cannabis Gold Rush

Apr 20, 2017

Yesterday, right on the cusp of 420, the California Supreme Court Committee on Judicial Ethics issued an opinion regarding “Extrajudicial Involvement in Marijuana Enterprises,” stating that judges should refrain from owning an interest in enterprises that sell or manufacture medical or recreational marijuana.

The Committee explained that California’s Proposition 215 (Compassionate Use Act (1996)) and Proposition 64 (Adult Use of Marijuana Act (2016)) did “not legalize medical or recreational marijuana” but rather that “they decriminalize certain marijuana offenses under California law.” However, “[d]espite the rapid decriminalization and new regulation of marijuana across the states, it remains a schedule I drug pursuant to the Controlled Substances Act. (21 U.S.C. §§ 801-904).”

The Opinion cited various canons proscribing judicial activities, including those requiring a judge to “respect and comply with the law” and “avoid impropriety and the appearance of impropriety…” and noted that Maryland, Washington and Colorado, three states that have decriminalized marijuana, have issued opinions prohibiting their state judges from participating in marijuana businesses.

The Committee suggested that a “reasonable person could conclude that a judge who disregards applicable marijuana laws for his or her own personal benefit is unable to act impartially anytime the judge rules on a marijuana-related matter” and that such lack of impartially could equally apply if the judge’s spouse participated in marijuana-related businesses.

The Committee concluded that a judge with “an interest in a marijuana-related business creates an appearance of impropriety, casts doubt on a judge’s ability to act impartially, and is incompatible with a judge’s obligations under canon 2 [impropriety] and canon 4A(1) [impartiality].”

However, the Opinion failed to address the hazier issue of whether California judges must also refrain from partaking of marijuana for medicinal or recreational use?  To date, there is no published ethics opinion on this issue.

The Committee appears to allude to that issue in its footnote: “The relatively recent enactment of state medical and recreational marijuana laws, and the conflict with federal law, presents a myriad of issues related to marijuana. However for purposes of this opinion, the committee addresses only the question presented [the ethics of judge having interest in marijuana enterprise].” In short, the Committee, and thus the California judiciary, face the same challenges faced by California residents; seeking to walk the tightrope between California law which permits medicinal and recreational cultivation, distribution and use and Federal law which forbids it.