by Omar Figueroa, May 13, 2019

On May possibly 10, 2019, the Condition of California Section of Finance produced the language of the Trailer Invoice for this year’s Governor’s Price range. The Trailer Invoice has various provisions relating to Cannabis.  This weblog publish will aim on the Trailer Bill’s provisions pertaining to provisional licenses.

California’s regulatory framework for cannabis is the Medicinal and Grownup-Use Hashish Regulation and Safety Act (MAUCRSA), which establishes a few licensing authorities: one) the Bureau of Cannabis Manage in the Section of Buyer Affairs, which licenses and regulates distributors, tests laboratories, merchants, microbusinesses, and party organizers, 2) CalCannabis Cultivation Licensing within just the California Division of Food stuff and Agriculture, which licenses and regulates cultivators, and 3) the Manufactured Cannabis Protection Board within the California Section of Community Well being, which licenses and regulates companies.

Now, MAUCRSA authorizes a licensing authority, in its sole discretion, to situation a provisional license if two ailments are satisfied: (one) the applicant “holds or held a temporary license for the same premises and the identical business cannabis activity” to be licensed by the provisional license, and (two) the applicant has submitted a concluded license software to the licensing authority, like proof that compliance with the California Environmental Excellent Act (CEQA) is underway.  MAUCRSA does not allow for a provisional license to be issued soon after January 1, 2020, and prohibits provisional licenses from being renewed.  The provisions are set forth in Section 26050.2 of the Business enterprise and Professions Code which is currently in outcome:

(a) A licensing authority might, in its sole discretion, issue a provisional license to an applicant if the following ailments are met:

(1) The applicant retains or held a short-term license for the identical premises and the same professional cannabis exercise for which the license may possibly be issued pursuant to this area.

(two) The applicant has submitted a done license software to the licensing authority, like evidence that compliance with the California Environmental High-quality Act (Division thirteen (commencing with Section 21000) of the Community Sources Code) is underway.

(b) A provisional license issued pursuant to this part shall be legitimate for twelve months from the date issued and shall not be renewed. Besides as specified in this portion, the provisions of this division shall utilize to a provisional license in the similar fashion as to an once-a-year license.

(c) Without limiting any other statutory exemption or categorical exemption, Division thirteen (commencing with Section 21000) of the Public Assets Code does not apply to the issuance of a license pursuant to this area by the licensing authority.

(d) Refusal by the licensing authority to situation a license pursuant to this portion or revocation or suspension by the licensing authority of a license issued pursuant to this portion shall not entitle the applicant or licensee to a listening to or an charm of the final decision. Chapter 2 (commencing with Part 480) of Division 1.five and Chapter four (commencing with Area 26040) of this division shall not use to licenses issued pursuant to this portion.

(e) This segment shall stay in impact only right until January 1, 2020, and as of that date is repealed.

This invoice would make major alterations to the system of provisional licenses.  It would delete the present January 1, 2020 repeal day set forth in subdivision (e) of Portion 26050.2 of the Enterprise and Professions Code, thus “extending provisional licenses indefinitely” as mentioned in the Legislative Counsel’s Digest.

 The  bill would also delete the present requirement that an applicant currently maintain or earlier held a temporary license in purchase to qualify for a provisional license provisional licenses would be opened up to these who have under no circumstances held a momentary license, or all those who have held a momentary license but not for the sort of preferred industrial cannabis action, or who have held a temporary license at a different premises.

The monthly bill would also enable a license software to be considered full, even if compliance with CEQA is not total, as long as the applicant offers “evidence that compliance is less than way.”  Similarly, it would allow for a license software to be viewed as complete, even if compliance with “local ordinances enacted pursuant to Segment 26200” is not comprehensive, as very long as the applicant supplies “evidence that compliance is less than way.”

The phrase “evidence that compliance is less than way” is not additional described and seems to allow for enough bureaucratic leeway.

At present, provisional licenses are legitimate for twelve months and are unable to be renewed the invoice would allow provisional licenses to be renewed every year, in the sole discretion of the licensing authority, “until the licensing authority issues or denies the provisional licensee’s annual license.”  Proposed Small business & Professions Code § 26050.2, subdivision (c).

The monthly bill would authorize a licensing authority, in its sole discretion, to “revoke or suspend a provisional license if the licensing authority decides the licensee unsuccessful to actively and diligently go after the specifications for the yearly license, or for any other reason.” Proposed Enterprise & Professions Code § 26050.two, subdivision (d). This provision appears to be intended to disfavor candidates who slack off after securing a provisional license by failing to “actively and diligently” pursue an annual license nevertheless, the catchall clause (permitting revocation or suspension “for any other reason”) appears obscure, in excess of broad, and vulnerable to constitutional problem.

Could a licensing authority, in its sole discretion revoke or suspend a provisional license for “any other reason” by any means? Not really.  If a choice-maker at the licensing authority had been to revoke a provisional license just mainly because just one of the entrepreneurs experienced the last name of Washington, and the determination-maker did not like any one with the past title of Washington, would that be a valid motive to revoke a provisional license?  What if the revocation were being, hypothetically, based mostly on an owner’s race, gender, sexual orientation, or other protected classification?  Would that be regarded as a permissible motive for revocation? With any luck , not the proposed catchall clause could be substantially clearer.

The monthly bill needs in required language (“shall”) the cancellation of a provisional license in four circumstances: issuance of an annual license, denial of an yearly license, abandonment of an software for licensure, or withdrawal of an application for licensure.

Finally, refusal to concern a provisional license, or the revocation or suspension by a licensing authority of a provisional license, would not entitle the applicant or licensee to a listening to, or an appeal of the decision, or related procedural protections.

In sum, the Governor’s Trailer Monthly bill would change provisional licenses from a shorter-expression resolve to a long lasting alternative that would give licensing authorities (the Bureau of Hashish Manage in the Department of Buyer Affairs, CalCannabis Cultivation Licensing in just the California Department of Food items and Agriculture, and the Created Cannabis Basic safety Board inside the California Office of General public Wellness) “sole discretion” over on a yearly basis renewable provisional licenses, which would be opened up not only to individuals who keep or have held a short term state license, but also to those people who never attained a short term license.

Continue to be tuned for additional updates relating to the Governor’s Trailer Monthly bill and provisional licensing.

This details is presented as an instructional provider and is not supposed as legal tips. For inquiries regarding provisional licenses, once-a-year licenses, MAUCRSA, or identical topics, make sure you speak to the Regulation Places of work of Omar Figueroa at (707) 829-0215 or to timetable a confidential authorized consultation.



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