The state has issued $100 million in funding assistance to help bolster legal marijuana businesses in California, an effort aimed to speed up license permitting in areas where it’s stalled.
The Department of Cannabis Control, managed by state officials, designated the funds be sent to 17 cities and counties where there are a disparate number of provisional marijuana business licenses (as opposed to full year licenses). As our Los Angeles marijuana business lawyers can explain, those provision licenses were intended to help quickly prop up the adult-use market, but the entire category was set to expire Jan. 1, 2022. That deadline has since been extended, allowing more municipalities time to kick-start the permitting process, while also meeting stringent environmental requirements.
The $100 million in grant money is intended to further accelerate progress – in turn squeezing out black market operators. The thinking goes that the more competitive, state-legal operations there are in a district, the fewer opportunities there will be for underground pot purveyors.
Applications to receive money through the Local Jurisdiction Assistance Grant Program, opened four months ago. Municipalities that were awarded the additional funding were those that had significant license processing backlogs. Funding is also available to implement social equity programs.
Goals for funding were outlined as followed:
- Hire or designate additional staff to help wade through the sizable workloads necessary to transition businesses into a well-regulated local market.
- Create streamlined license processing with dedicated IT systems.
- Complete thorough environmental assessments to ensure water is protected and energy is renewable.
Municipalities can use their funds in other ways, but they must be approved by the state. One example is in Long Beach, where part of the funds are going to be used on website design, technology updates and training.
Other California Cannabis Business Funding
In addition to this program, cannabis companies may be eligible for other non-profit funding to help bolster operations. For instance, nearly $30 million in was awarded to nearly 60 non-profits focused on addressing the fallout of the ill-conceived war on drugs. The state’s Department of Fish & Wildlife solicited proposals for a program aimed at helping small cannabis growers on environmental clean up and restoration.
Elsewhere in the country, there have been hundreds of millions of dollars in public-private funds designated for the promotion of social equity in the marijuana business market.
Cannabis Companies Generate Billions in Tax Revenue
Although such programs are generous, it’s important to note that the legal market in this country have generated billions for state governments. According to the Marijuana Policy Project, states with legal cannabis have generated $10.4 billion in state sales taxes since adult-use marijuana first hit the legal market in Washington State and Colorado in 2014. That figure includes the more than $3 billion+ generated in sales taxes last year.
Bottom line: States with legalized marijuana for adult sale are seeing substantial financial benefits, which can help to fuel education, construction, conservation, and community reinvestment. Ensuring communities that want to introduce a thriving legal cannabis market to do so is in the best economic interests of not only the businesses, but also the state and local governments.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 714-937-2050.
Additional Resources:
California Awards $100 Million To Support Local Marijuana Business Development, Jan. 7, 2022, By Kyle Jaeger, Marijuana Moment
More Blog Entries:
California Cannabis Companies Eye Tax Revolt, Dec. 15, 2021, California Marijuana Business Attorney Blog