California Cannabis Grant

Cultiva Law, PLLC

As has been heavily and thoroughly reported by now, the once-mecca of cannabis named California is suffering setback after setback in the recent happenings of their state’s cannabis industry. Total sales across the $5 billion-dollar state industry are down 8.2 percent from the previous year and given such a massive financial shortfall, several rounds of layoffs have become an uncomfortably common occurrence throughout almost all businesses in the California cannabis industry. This sharp decline in sales is especially notable given how 2022 was the first year with declining sales. Entire multi-state operators and nationally recognized brands are completing a Calfornian exodus quicker than many citizens of the state and large-scale illegal grows are still an ever present problem that cut deeply into the bottom line of legal cultivation facilities.

In an attempt to provide a desperately needed economic boost to this recently troubled industry and a move that will surely make the blood of prohibitionists everywhere boil over, The Golden State’s cannabis regulatory body, The Department of Cannabis Control announced a state-ran grant program to bolster access to cannabis in counties and jurisdictions without any licensed cannabis retailers. Even in a state as unanimously synonymous with cannabis history and cannabis culture as California is, there are still massive “cannabis deserts” that span several counties and hundreds of miles where there is not a single recreational cannabis dispensary.

According to the DCC, two thirds of local governments and 33 different counties in California have decided not to authorize recreational cannabis sales, leaving entire regions of the state without any options to recreationally purchase cannabis. Several of these counties have significant rates of cannabis consumption yet no retail locations, meaning that consumers must either drive hours or procure their cannabis through unlicensed means.

To incentivize both local economies and the statewide cannabis industry, DCC is now creating the Local Jurisdiction Retail Access Grant Program. It could be a program that provides a significant boost to an industry needing it and a boost to access to safely tested and regulated cannabis. And given that it’s a government-sponsored grant program, the requirements to qualify for such a grant are surely stringent but not unnecessarily so. Even better for the California cannabis industry and those who’ve been barred from working in cannabis for too long, the requirements and allocation of this funding actually has a priority for social equity applicants as well.

“The Retail Access Grant”, reads the DCC website, “provides local governments with resources to develop and implement cannabis retailer licensing programs. Up to $20 million total funding is available, distributed in two phases.

The two main requirements for a jurisdiction to be able to receive a grant are that the jurisdiction doesn’t currently offer retail licensing for cannabis businesses and “has a plan to develop and implement a cannabis retail licensing program”. Unlike other state-sponsored grant programs, a prospective grant recipient has noticeable flexibility in how they may utilize this funding for. The funds themselves may be used to cover any number of costs and expenses that consistently arise when opening and operating a cannabis business, such as the hefty licensing and permitting fees as well as the very vital component of personnel costs. Even the various environmental reviews that cannabis cultivation facilities and retailers must undergo annually can be covered by Retail Access Grant funds.

In one of a number of ways that the Local Jurisdiction Retail Access Grant Program prioritizes social equity and giving opportunities to those whose lives were greatly impacted by cannabis’ prohibition, the allocated funds may also be used for “support of equity applicants and licensees”. In fact, the very first priority listed on the DCC’s website is for jurisdictions that assist in the licensing and operating of social equity businesses.

“DCC is committed to providing equity to communities harmed by past cannabis criminalization through local pathways to licensure and business success.” the site reads. “Local jurisdictions that submit a plan to incorporate equity into their permitting process will be eligible for priority review.”

Another priority mentioned are for jurisdictions that have predominantly lower cannabis retailers compared to the level of regular cannabis consumption happening within their counties. Surprisingly, a number of these counties aren’t far off in the countryside by any means. Even though both these counties have a population of about 3.2 million each, Orange and San Diego Counties are listed as counties that receive priority as does the heavily populated San Mateo and Fresno County.

With these funds, the Local Jurisdiction Retail Access Grant Program has three main reasons they’re allocating these grants.

            “Provide consumers with reliable access to regulated and tested cannabis, reduce demand in the illicit market and establish enough cannabis retail stores statewide to meet existing consumer demand.”

In a state where the problem of illegal grow houses has become as large as the grow houses that are getting busted by law enforcement such as the $15 million dollar grow house shut down back in October, million-dollar grant programs such as this could curb this problem significantly.

As the California cannabis industry as well as other state industries have been facing hardship after hardship while significant disadvantages still exist due to the federal status, it’s interesting to see a state as historically known for cannabis as California utilizing state funds to provide further opportunities to such an otherwise flourishing but currently struggling industry.

For more information regarding access to the Local Jurisdiction Retail Access Grant Program, please visit the Department of Cannabis Control’s website about the grants.

 

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