California’s Grace Period for Temporary Permits is Expiring. Here’s What it Means for the Marijuana Industry.

If you thought the cannabis permitting process was arduous already, get ready because it’s about to get a lot tougher -- and more expensive

California sought to jump-start its marijuana industry in January by giving businesses temporary, 120-day permits that briefly waived big fees and other costly requirements, but that grace period is ending and many say the expense and red tape of getting a regular license is a headache.

Some pot shops face fees of $73,000 before they can get a regular annual license from the state Bureau of Cannabis Control. Costly upgrades to security and product testing also kick in soon, and sellers and growers will have to pass a background check that could disqualify anyone with serious criminal records.

The grace period was officially up Tuesday for anyone who received a temporary license on Jan. 1. However, the state has offered another 90-day extension to those actively seeking an annual license.

How about the expenses?

All businesses must pay a $1,000 application fee as well as license fees based on the value of marijuana products they expect to sell this year. In future years, the fees will be based on what actual sales were in the previous year.

The annual license fee ranges from $4,000 for a retailer expecting to handle pot worth up to $500,000. The highest fee is $72,000 for those handling more than $4.5 million in cannabis in the year.

Fees for distributors range from $1,200 to $125,000 based on the value of pot they expect to handle.

That doesn’t include costs associated with the state’s new track-and-track program, marijuana testing mandates, and requirements on employee training and facility security.

Like we said, brace yourselves.


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