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Here’s what the start of recreational marijuana sales in California will look like on Jan. 1
By Brooke Edwards Staggs, The Cannifornian
Posted on Sep 28, 2017
Forget ushering in the New Year by buying legal weed from a California dispensary as the clock strikes midnight. But some shops should be selling recreational marijuana by the time you wake up New Year’s Day — though you may have to drive a while to find one, no matter where you live.
The world’s biggest marijuana market will open for business in three months, as marijuana sales for anyone 21 and older become legal in California.
Jan. 1 is also the day the first state licenses will be issued for every type of marijuana business, from cultivators of medical cannabis to distributors of recreational marijuana.
Voters passed Prop. 64 in November 2016 with the idea that key points of the law would be hammered out before Jan. 1, 2018. And now, after much conversation and negotiation, details on when sales will start, how businesses can apply for permits and how this will all be enforced are starting to trickle out.
But even these details aren’t set in stone, as the state continues to work out plans for a temporary licensing program that will keep California on track to certify businesses at the start of 2018.
Above all, it’s still unclear where Californians will be able to buy recreational marijuana, since state law gives cities and counties first say as to whether cannabis businesses will be allowed in their borders.
California top state pot regulator Lori Ajax addresses an industry group meeting in Long Beach on Thursday, Sept. 28, 2017. (AP Photo/Damian Dovarganes)
“The biggest thing is they will have to have local approval for conducting commercial cannabis activity,” Lori Ajax, chief of California’s Bureau of Cannabis Control, said of would-be marijuana retailers. “They will need that before the state can issue them a temporary license.”
San Diego has a final city council vote on regulations for marijuana businesses scheduled for Tuesday, Oct. 3. City spokesman Paul Brencick Sr. said that as long as those policies are approved and certified, the city hopes to issue local licenses for recreational shops and other businesses by the end of the year.
Santa Ana plans to update its ordinance before Jan. 1 to allow recreational marijuana sales, spokeswoman Alma Flores said. Eureka, in Humboldt County, is similarly positioned. So is Cathedral City in the Coachella Valley.
Bellflower, in southern Los Angeles County, is already accepting applications for recreational cannabis store permits. So is Palm Springs; as long as voters pass a suggested tax for businesses on Nov. 7, City Attorney Edward Kotkin said, the desert city should be ready to hand out local licenses before the end of 2017.
That puts shops in those cities in a good position to sell the first legal recreational weed in California as soon as they get an email — which could come as soon as the start of the business day Jan. 1 — saying their license has been approved.
Two of the state’s biggest cities aren’t on track to sell New Year’s weed.
Los Angeles plans to permit adult use cannabis shops, but it’s looking unlikely that’ll happen by the start of next year. And San Francisco this week acknowledged it needs more time to roll out a program that includes a racial and economic equity component, giving preference to applicants who’ve been disproportionately hurt by the war on drugs.
In Colorado, which in 2014 became the first state to let people buy marijuana without a doctor’s recommendation, only around 30 percent of cities allow recreational shops. It remains to be seen whether California will be more or less welcoming to the legal marijuana market.
Even if cities miss the Jan. 1 launch, Ajax said there’s no limit on the number of temporary licenses that will be handed out. And the state will be issuing temporary permits through the end of 2018. So if a city or county doesn’t get its local program in place until later in the year, she said businesses will still be able to take advantage of the streamlined licensing option.
Ajax has been working on marijuana licensing since before voters passed Prop. 64. Initially, her job was to oversee licensing and regulation of the state’s medical marijuana industry, which has gone largely unregulated since California became the first state to legalize medical use in 1996. Then, in November, voters legalized recreational marijuana and Ajax’s workload doubled overnight.
Observers have for months questioned whether the so-called “pot czar” could pull off a Jan. 1 launch.
Ajax said the only delay she considered was bumping the roll out to Jan. 2, since state offices are supposed to be closed New Year’s Day. But she said her team will work over the holiday so they can start emailing out temporary licenses as soon as they get them processed.
The three state agencies regulating the cannabis industry — the Department of Food and Agriculture for cultivators, the Department of Public Health for manufacturers and the Bureau of Cannabis Control for retailers, distributors and testers — all plan to start accepting applications for temporary business licenses sometime before Jan. 1. Ajax said her department is aiming for early December.
The permits will be temporary, good for four months.
That window gives marijuana business owners time to compile the slew of additional information that’ll be needed to get permanent licenses, including security plans, insurance bonds and business formation documents. It also gives the state time to review the applicant’s information and conduct background checks.
Derek Peterson, CEO of Terra Tech, which owns a chain of dispensaries plus cultivation and extraction facilities, said he appreciates the state’s flexible approach in issuing temporary licenses so businesses like his can operate without interruption.
“The immediate adoption of over-regulation could have stifled the growth of the industry,” he said. “This phasing-in of regulation is a far more responsible approach and gives businesses an opportunity to adapt from a relatively unregulated environment to a broadly regulated environment.”
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Even with the temporary licensing program, Ajax said it’s not realistic to think her team will be able to process every application it receives on New Year’s Day.
“We’re trying to have enough staffing for whatever comes in the doorway,” she said. “It’s just hard for us because we don’t know how many people we’re going to get applying. We don’t know whether its tens of thousands or a couple thousand.”
Technically, any business that doesn’t have a state license will be operating illegally as of Jan. 1. A proposed six-month grace period for businesses to come into compliance was eliminated through Senate Bill 94, a budget trailer bill approved in June to align the medical and recreational cannabis laws.
But Ajax said her office isn’t going to be out in the field the first week of 2018 looking for businesses that aren’t licensed.
“We know we can’t possibly issue everything we need to on day one. We’re going to be reasonable here.”
State regulators Lindsay Rains, John Halligan and Amber Morris listen to public feedback on proposed cannabis regulations during a hearing at Santa Ana’s Delhi Center. (Photo by Cindy Yamanaka, Orange County Register/SCNG)
The state’s goal is to get operators in the regulated market, she said. So she’s confident local law enforcement won’t start targeting businesses that are waiting for state licenses either as long as they have local permits in place.
“We want people to continue to operate — especially ones that are already operating in compliance with the locals,” Ajax said.
Businesses will have the best chance at getting approved Jan. 1, Ajax said, if they submit their application as soon as they’re available and if they’re careful to include all required information.
While they won’t be issuing any licenses until Jan. 1, Ajax said her bureau plans to be in touch with aspiring licensees in December to let them know if their applications are complete and on track for approval.
Though they haven’t settled on a fee yet, the bureau has put out a list of information that applicants will need to have ready. Along with a local permit, they’ll have to provide the business address, proof of permission to use the property and a diagram of the planned operation.
The Department of Public Health expects to ask for similar information from manufacturers, while the agriculture department said it couldn’t share further details yet its planned temporary licenses for cultivators.
All three agencies still have a lot to get through in the next three months, including certifying environmental reports, issuing emergency regulations and launching an online application system.
The agencies will also be holding workshops throughout the state in October to help business owners better understand the process before applications are in circulation.
Staff writer Will Houston contributed to this report.
