California Releases Guidelines for $100M Cannabis Industry Grants

The California Department of Cannabis Control (DCC) released guidelines and application requirements last week for a $100 million local jurisdiction grant program, according to an agency press release. The program was proposed by Gov. Gavin Newsom in his 2021-2022 budget which was approved by the legislature.

The purpose of the grants is to help local jurisdictions transition the high number of provisional licenses into the more permanent annual license type. Specifically, the grants are meant to streamline the license transition process for local governments and help to meet California Environmental Quality Act (CEQA) requirements. There is additional funding for localities with social equity programs to help transition social equity licensees who hold provisional licenses to annual licenses.

“The local jurisdictions eligible to receive grant funding represent areas with large numbers of small, equity and legacy cannabis businesses, including small cultivators that often have unique regulatory needs.” — DCC Director Nicole Elliott in a statement

There are 17 cities and counties eligible for grant funding, including some of California’s largest cannabis markets like Los Angeles, San Francisco, San Diego, Oakland, and Long Beach. The grants could range from $400,000 to $22 million, according to the press release. DCC said the grants could go out as early as the end of 2021. DCC also said that officials had worked with local jurisdictions to develop the best program to meet each region’s specific needs, and they took feedback on proposed program guidelines and adjusted the program in response.

“Each jurisdiction is unique. The development of this program acknowledges this fact and was informed by the conversations we had with eligible jurisdictions about their specific needs,” said Elliott. “The way we have structured this program encourages jurisdictions to propose novel, innovative ways to support their local businesses in making the transition into annual licensure.”

The provisional licensing program was created to help cannabis operators transition into the legal cannabis market. The program was due to sunset on Jan. 1, 2021, but was extended to allow a large number of provisional license holders — many of whom would have had to close their doors in California’s legal cannabis market if the program was not extended — to continue to work on license approval and complete CEQA requirements.

The extension included rolling sunset dates, based on license types, and set specific benchmarks for provisional license renewal in hopes that the backlog of provisional-to-annual license transitions would be resolved.