In September of 2021, the Department of Cannabis Control issued updated regulations after the Bureau of Cannabis Control (BCC) was converted to the Department of Cannabis Control (DCC), and the three licensing agencies were, theoretically, combined under the single DCC Umbrella. One of the larger issues, addressed in these updated regulations, was pertaining to Provisional Licenses. Below you will find information and language on how Provisional License will be affected by, both, new applications and license renewals.
New License Applications
For every cannabis project, located in the State of California, you must obtain “Local Authority” in order to move on to the process of submitting your state license application.
§15001.1 states:
“(a) Until June 30, 2022, the Department may, in its sole discretion, issue a provisional license to a commercial cannabis business if:
(1) The applicant submits a complete application, in accordance with section 15002, and the required application fee to the Department on or before March 31, 2022.
(2) For an application for a license that includes cultivation activities, the applicant provides any of the following documents:
(A) A final streambed alteration agreement;
(B) A draft streambed alteration agreement provided by the Department of Fish and Wildlife and signed and returned to the Department of Fish and Wildlife;
(C) Written verification by the Department of Fish and Wildlife that a streambed alteration agreement is not needed; or
(D) Written verification by the Department of Fish and Wildlife that the applicant submitted a notification described in section 1602 of the Fish and Game Code, submitted payment of applicable fees pursuant to section 1609 of the Fish and Game Code, and is responsive to the Department of Fish and Wildlife as prescribed in section 26050.2 of the Business and Professions Code.
(3) Issuance of the license would not cause the commercial cannabis business to hold multiple cultivation licenses on contiguous premises to exceed one acre of total canopy for outdoor cultivation, or 22,000 square feet for mixed-light or indoor cultivation, if the application is received on or after January 1, 2022. For purposes of this subsection, premises will be considered contiguous if they are connected, touching, or adjoining.”
In other words :
- the state MAY continue to issue Provisional Licenses until 6/30/22 BUT ONLY IF YOU HAVE YOUR APPLICATION SUBMITTED ON OR BEFORE 3/31/22.
- The state MAY continue to issue Provisional Licenses for projects that include cultivation (for example a Microbusiness) if the application was submitted on or before 3/31/22, only if you have also submitted Fish and Wildlife documents AND there is no attempt to stack licenses.
So what happens AFTER June 30, 2022???
§15001.1 goes on to state:
“(b) After June 30, 2022, and until September 30, 2022, the Department may, in its sole discretion, issue a provisional license for cultivation to a commercial cannabis business if:
(1) The applicant submits a complete application, in accordance with section 15002, and the required application fee to the Department on or before June 30, 2022.
(2) The commercial cannabis business is not applying for a cultivation license for a premises that exceeds 20,000 square feet of total canopy for outdoor cultivation.
(3) The commercial cannabis business provides any of the following documents:
(A) A final streambed alteration agreement;
(B) A draft streambed alteration agreement provided by the Department of Fish and Wildlife and signed and returned to the Department of Fish and Wildlife;
(C) Written verification by the Department of Fish and Wildlife that a streambed alteration agreement is not needed; or
(D) Written verification by the Department of Fish and Wildlife that the applicant has submitted a notification described in section 1602 of the Fish and Game Code, submitted payment of applicable fees pursuant to section 1609 of the Fish and Game Code, and is responsive to the Department of Fish and Wildlife as prescribed in section 26050.2 of the Business and Professions Code.
(4) Issuance of the license would not cause the commercial cannabis business to hold multiple cultivation licenses on contiguous premises to exceed one acre of total canopy for outdoor cultivation, or 22,000 square feet for mixed-light or indoor cultivation, if the application is received on or after January 1, 2022. For the purposes of this subsection, premises will be considered contiguous if they are connected, touching, or adjoining.”
In other words,
3/31/22 was the last day to submit an application to be considered for a NEW Provisional License. 6/30/22 is the last day for NEW Provisional Licenses to be issued with the exception of certain small cultivation licenses.
So what happens if you missed the 3/31/22 submission date???
- You MAY still submit an application. However, you MAY NOT operate your commercial cannabis business until you have been granted a full Annual License by your state agency.
Renewal License Applications
For every state license, provisional or annual, you will have until your renewal date to make changes, submit financials, and generally advise the licensing authority of updates from the last year of licensing. So what happens if you have been issued a Provisional License and your license is coming up for renewal?
DCC §15001.2. States:
“(b) For provisional license renewals from July 1, 2022, through June 30, 2023, in addition to the requirements of section 15020, a provisional licensee must also provide to the Department:
(1) Evidence that one of the following California Environmental Quality Act (CEQA) (Division 13 (commencing with section 21000) of the Public Resources Code) requirements has been met:
(A) Documentation, such as a letter, report, notice or other type of written communication from the local jurisdiction, demonstrating that the local jurisdiction is in the process of preparing a site-specific initial study, addendum, or checklist pursuant to title 14, California Code of Regulations, section 15063, 15164, 15168, or 15183 to demonstrate whether it is consistent with a previously circulated and adopted negative declaration, mitigated negative declaration, or environmental impact report;
(B) Documentation, such as a letter, report, notice or other type of written communication from the local jurisdiction, demonstrating that the local jurisdiction has made substantial progress during the previous 12-month licensure term toward completing project specific environmental review by drafting, preparing, or circulating for public review an environmental document pursuant to CEQA;
(C) Documentation requested by the Department of the provisional licensee that demonstrates the furtherance of environmental review during the previous 12-month licensure term;
(D) Other information requested by the Department from the provisional licensee that demonstrates evidence of substantial progress toward compliance with CEQA during the previous 12-month licensure term; or
(E) Documentation that demonstrates compliance with CEQA is complete.
(2) For cultivation licenses, a provisional licensee must also provide one of the following forms of documentation demonstrating progress with compliance with chapter 6 (commencing with section 1600) of division 2 of the Fish and Game Code:
(A) A final streambed alteration agreement issued by the Department of Fish and Wildlife;
(B) A draft streambed alteration agreement provided by the Department of Fish and Wildlife and signed and returned to the Department of Fish and Wildlife by the provisional licensee;
(C) Written verification by the Department of Fish and Wildlife that the provisional licensee has submitted a complete notification described in section 1602 of the Fish and Game Code; or
(D) Written verification by the Department of Fish and Wildlife that a streambed alteration agreement is not needed.
(c) For provisional license renewals on or after July 1, 2023, in addition to the information required in section 15020, a provisional licensee must also provide to the Department:
(1) Documentation, such as a full or partial copy of the administrative record, demonstrating that one of the following CEQA requirements has been met:
(A) The local jurisdiction has prepared and circulated for public review a negative declaration or a mitigated negative declaration;
(B) The local jurisdiction has determined that an environmental impact report is required pursuant to section 21157 of the Public Resources Code and has either made substantial progress in preparing that environmental impact report or has a contract or contracts with consultants in place for the preparation of that environmental impact report;
(C) The local jurisdiction has certified that it has conducted a reasonably comprehensive site-specific review and has reviewed, prepared, and deemed complete an initial study, addendum, or checklist pursuant to title 14, California Code of Regulations, section 15063, 15164, 15168, or 15183 demonstrating consistency with a previously circulated and adopted negative declaration, mitigated negative declaration, or environmental impact report, in preparation for approval of an annual license; or
(D) The local jurisdiction has reviewed, prepared, and deemed complete a notice of exemption pursuant to section 21108 or 21152 of the Public Resources Code, except for ministerial projects not subject to the California Environmental Quality Act pursuant to section 21080(b)(1) of the Public Resources Code.
(E) Documentation submitted pursuant to subsection (c)(1) may include, but is not limited to:
(i) Any environmental documentation, including, but not limited to, an exemption, initial study, negative declaration, mitigated negative declaration, and/or environmental impact report;
(ii) Any staff reports and related documents prepared by the local jurisdiction;
(iii) Any written transcript or minutes of the proceedings of the local jurisdiction;
(iv) Any notice(s) issued by the local jurisdiction to comply with CEQA and the CEQA Guidelines;
(v) Any proposed decisions or findings considered by the local jurisdiction by its staff or the applicant; and
(vi) Any documentation of the local jurisdiction’s final decision
(2) For cultivation licensees, one of the following forms of documentation demonstrating progress with compliance with chapter 6 (commencing with section 1600) of division 2 of the Fish and Game Code:
(A) A final streambed alteration agreement issued by the Department of Fish and Wildlife;
(B) A draft streambed alteration agreement provided by the Department of Fish and Wildlife and signed and returned to the Department of Fish and Wildlife by the provisional licensee; or
(C) Written verification from the Department of Fish and Wildlife that a streambed alteration agreement is not needed.
(d) The Department will not renew a provisional license authorizing cultivation if:
(1) The State Water Resources Control Board has notified the Department that the provisional licensee is not in compliance with section 26060.1(a) or (b) of the Business and Professions Code or the principles, guidelines, and requirements established pursuant to section 13149 of the Water Code.
(2) The Department of Fish and Wildlife has notified the Department that the provisional licensee is not in compliance with any final streambed alteration agreement, any conditions set forth in a signed draft streambed alteration agreement, or a condition established pursuant to section 26060.1(a) or (b)(1) and (2) of the Business and Professions Code.
(3) After January 1, 2023, if renewing the license would cause a licensee to hold multiple cultivation licenses on contiguous premises to exceed one acre of total canopy for outdoor cultivation or 22,000 square feet for mixed-light or indoor cultivation. For the purposes of this section, premises will be considered contiguous if they are connected, touching, or adjoining.”
So what does this all mean??? Big picture, for license renewals after 6/30/22, you are going to be required, for all license types, to provide proof that you are making substantial efforts to address CEQA and transition your license to full Annual status.
We Are Prepared To Help You
The Law Office of Dale Schafer has partnered with Mark Piersante, of Piersante & Associates, to help you address CEQA issues and obtain an Annual License or transition your license from Provisional to Annual. Mark has over 30 years of experience in working with government agencies to address CEQA issues within the oil industry and he is now prepared to help cannabis operators to obtain full Annual status.
To set up a consultation, contact our office at (530) 320-4191 or daleschaferlaw@gmail.com
Law Office of Dale Schafer 