A Note On CEQA From The DCC

CEQA review for cannabis businesses

What is CEQA

The California Environmental Quality Act (CEQA) is a 1970 state law that requires environmental review of proposed projects. The CEQA process aims to:

  • Identify significant environmental impacts
  • Avoid or reduce environmental damage
  • Aid public participation
  • Add transparency to government decisions

The CEQA review process

Projects that require CEQA review

All annual state cannabis licenses are subject to CEQA compliance. The DCC may only issue an annual license once a project complies with CEQA.

CEQA documents may be prepared during the local permitting process if the local process is discretionary. Establish a relationship with your local permitting office to ensure you have all documents required to be locally compliant to operate and to obtain what is needed for the DCC CEQA review process.

Who reviews CEQA compliance

Cannabis businesses are required to be licensed by the state and must also be licensed or permitted by their local government. When multiple government agencies are involved, one agency acts as lead for CEQA review and the remaining agencies become responsible agencies. All agencies must ensure CEQA compliance before proceeding with their discretionary licensing or permitting decisions.

Lead and responsible agencies

The lead agency has primary responsibility and discretionary authority for approving a project. This includes identifying required documents, ensuring they meet CEQA criteria and overseeing the completion and submission of documents.

The responsible agency has some discretionary authority over a part of the project. There can be more than one responsible agency on a single project.

The local government typically acts as the lead agency, and DCC acts as the responsible agency. If your local permitting process is ministerial and exempt from the preparation of a CEQA document, DCC will act as the lead agency. If DCC is the lead agency, there may be additional fees associated with preparation of CEQA documents.

DCC will be the lead agency for all cannabis businesses located on tribal land. If your project is located on tribal land, please email the DCC Environmental Evaluation Program at EnvironmentalReview@cannabis.ca.gov for additional guidance.

Demonstrating CEQA compliance

Local governments have unique requirements for cannabis businesses to demonstrate CEQA compliance. This may include project-specific CEQA documentation, such as:

  • Notices of Exemption
  • Initial studies
  • Mitigated Negative Declarations
  • Notice of Determinations
  • Addendums
  • Tiering checklists
  • Environmental Impact Reports

Other documentation may also be needed for the CEQA review process, including:

  • Local business permits
  • Conditional use permits
  • Staff reports
  • Other local permitting documentation

Tips for applicants

Cannabis businesses can prepare for the CEQA review process by:

  • Working closely with representatives from your local permitting program to learn about CEQA requirements so you can complete processes and prepare the right documents
  • Responding promptly to DCC requests for clarification or more information
  • Hiring an environmental consultant that specializes in the CEQA process, if necessary

Dale Schafer Law News – 4/11/22

#cannabisindustry – “But the beneficial impact exceeds just tax dollars.
The total U.S. economic impact from marijuana sales in 2022 is expected to reach $99 billion – up more than 20% from last year – and upwards of $155 billion in 2026, according to analysis from the newly published MJBiz Factbook.
To measure the industry’s economic impact, the MJBizDaily data team analyzed similar industries, consulted with economists and applied a standard multiplier of 2.8 on projected recreational and medical marijuana retail sales….
The industry encompasses agricultural, manufacturing and retail activity. But, in some markets, it also includes events and hospitality, which tend to have even higher economic impact than other industries….
That impact comes directly from the day-to-day needs of workers in the cannabis industry, including spending on life’s necessities such as housing, transportation, entertainment and more.”

https://mjbizdaily.com/marijuana-industry-will-add-nearly-100-billion-to-us-economy-in-2022/

For those of you have been watching this saga over the past several years……
#cannabisnews – “The whole town of Nipton, CA has once again been sold, according to the realtor who represented the property. Many of the sale details are not yet being made public including the price. 8 News Now has been able to confirm it was bought by a group out of Las Vegas.”
Anybody know the status of CEQA in National City? If they are passing the buck on Live Scans then they are probably passing the buck on CEQA too. If you have a project in National City, it’s in your best interest to know your CEQA status and if that will meet the requirements at the State level….
#californiacannabis – “National City council members last week relieved the police department of conducting background checks on cannabis businesses seeking permits, instead opting to have the state handle the process…..
“One way to look at it is that just to get approval to run the live scans is going to take a year. After that, we could make appointments to do those live scans and then wait for the live scan results,” said Gamwell. “So now, when the applicant is preliminarily approved at the local level and they apply at the state, however long the state takes to do those approvals is our new timeline.””

https://www.sandiegouniontribune.com/communities/south-county/story/2022-04-10/national-city-will-depend-on-state-to-do-background-checks-on-cannabis-opertions

#californiacannabis – “The traffic stop records, which were obtained by the ACLU and the Asian Law Caucus, showed that though Asians make up just 2.6% of the population in the county, they accounted for 27.4% of all traffic stops in 2021 in which officials identified the people stopped.
The data also shows that that more than 61% of the people the sheriff referred for prosecution for violations of the water ordinance were Asian American. Only 8% were white, though white people comprise 75% of the county’s population.
“Based on the records produced by the county, it appears the sheriff rarely ever refers white people to the district attorney for violating the water transportation ordinance or water extraction ordinance,” the groups said in a brief filed with a federal court…..
“It is across the board,” he said. “All the data we’ve examined thus far indicates the targeting of the Asian community and the Hmong community.””

https://www.theguardian.com/us-news/2022/apr/08/california-asian-discrimination-water-rights-siskiyou

#californiacannabis – LAKE COUNTY, Calif. — “With drought conditions deepening, the Board of Supervisors this week will discuss implementing an urgency ordinance that would place a temporary moratorium on the approval of new agriculture and cannabis cultivation projects in an effort to protect the county’s water supply.
The‌ ‌board will meet beginning ‌at‌ ‌9‌ ‌a.m. ‌Tuesday, April 12, in the board chambers on the first floor of the Lake County Courthouse, 255 N. Forbes St., Lakeport.”

https://www.lakeconews.com/news/72242-supervisors-to-consider-temporary-moratorium-on-new-ag-and-cannabis-projects

Get Started On Your Annual License Now – The Truth About Provisional Licenses

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 :

  1. 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.
  2. 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??? 

  1. 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