2023 California Legislation – Clark Howell LLP

Support Local Equity Applicants: Urge Your Reps to Support SB-51

February 17th was the last day for bills to be introduced in Sacramento. This year, there are almost 4 dozen bills that directly reference cannabis. It’s always interesting to see the assortment, as it offers insight into which reforms California legislators are most immediately concerned about. There are bills related to plant tagging, crime control, psychedelic decriminalization, environmental protections, enforcement, and more. Others that failed previously are getting another shot (such as the catering bill).

It’s early in the year, and these bills are just getting started in the current 2-year session (2023-2024). We also have a number of newly elected legislators following the November 2022 election. This is the time to learn what’s under consideration and engage in the process with bills that matter most to you. Some of these will make it through committee hearings in each house of the California legislature and arrive on the Governor’s desk this fall; others will lose steam in committee. In part, that depends on all of us.

As we do each year, we’ve hand-selected bills to highlight for you. Our choices this year focus on extended provisional licensing for social equity operators, license transfers, a health warning brochure, hemp in the cannabis supply chain, and an eyebrow-raising proposal to fund enforcement grants for cities that ban cannabis cultivation and/or retail sale.

Today’s bulletin focuses on extended provisional licensing and includes an important call to action. Keep an eye on your inbox next month to read our round-up of the other bills.

Provisional Licenses for Local Equity Applicants (SB-51, Bradford)

Provisional Licenses for Local Equity Applicants (SB-51, Bradford)

Under current law, the Department of Cannabis Control (DCC) can issue a provisional license to a local equity license applicant until June 30, 2023 (applications are due at the end of this month, by March 31).

SB-51 proposes to extend this timeline indefinitely to allow provisionals for local equity applicants beyond June 2023. Note that Senator Bradford’s proposal would only extend this deadline for retail applications and renewals are limited to 5 years.

As an urgency statute, it would take effect immediately upon enactment and requires two-thirds support in each chamber of the California legislature (Senate and Assembly).

This bill is critical for local equity applicants in cities like Los Angeles, where 100 verified Social Equity Individual Applicants (SEIAs) won the retail application lottery just 3 months ago. Those lottery winners are likely to need more time to complete state provisional applications. Other California cities are just getting started with creating their local equity programs and awaiting award funds from the state’s grant program to complete equity assessments, develop their programs, and support local equity applicants with startup and licensing costs. The bottom line is that March 31st is coming quickly and many social equity applicants will suffer if they can’t pursue a provisional license (a bridge to the more difficult annual license) as general applicants throughout the state have been able to do.

We also believe it’s important that equity applicants can obtain provisional licenses for non-retail activities.

SB-51 has been set for hearing in the Senate Business, Professions and Economic Development Committee on March 27, 2023 at 12 p.m. At minimum, please send your Senate letters by that date to make sure your feedback is considered.

CALL TO ACTION:
Write to your Senator and Assemblymember today.

Step 1: Find your reps using this link.
Step 2: Customize the template email below, which includes our suggested amendments.
Step 3: Send it to both your state reps to urge support for SB-51.
Step 4: Track the bill’s status here.

Dear [insert recipient’s name here – for example, “Assemblymember Ortega” / “Senator Skinner”],

I respectfully urge you to support cannabis equity applicants by voting YES on SB-51. Equity programs in California are still under development and many equity applicants have not even had the chance to submit state applications yet. The provisional license is a stepping stone to the more challenging requirements of an annual license. General licensees had the opportunity to move from “temporary” to “provisional” to “annual” licenses, and equity applicants deserve the same chance.

I also urge you to propose the following amendments:
1) Expand eligibility for provisionals to non-retail license types.
Equity applicants throughout the supply chain (for example, product manufacturers and distributors) will also need provisional licenses.

2) Remove the 5 year renewal limit.
Most licensees in California still have provisionals, even 5 years into implementation. The opportunity to transition to an annual may depend on local government action, and if the state must impose a timeline, it should be used to put pressure on local governments rather than placing the burden on the local equity applicants.

[Optional: Insert personal note about why this matters to you.]

Thank you in advance for your support.
Sincerely,
[Your full name]

You can also utilize NORML’s form here. Enter your address on the first screen to identify your Senator, and on the next screen, you can customize the letter to add our suggested amendments text. The form is set up to send the message only to your Senator, so you would need to email your Assemblymember separately.

Please share this information with others in your network who would take action to support California’s social equity applicants. We’ll be keeping our eyes on SB-51 and especially the March 27 hearing.

We’ll be back in your inbox next month with more legislative news.

Call us anytime with questions. We’re here to help you understand how the proposed legislation may impact your business.