The Department of Cannabis Control (DCC) today released proposed emergency regulations to allow cannabis license fee waivers for equity applicants and licensees. These regulations specify requirements outlined in
Senate Bill (SB) 166 (Business and Professions Code, section 26249).
Notice of proposed emergency rulemaking for cannabis license fee waivers
DCC is providing notice to the public of its intent to adopt emergency regulations to provide licensing fee waivers to qualified equity businesses statewide. The waivers are designed to assist individuals harmed by the War on Drugs with starting and operating a cannabis business. The regulations would implement the fee waiver provisions of SB 166. DCC will start accepting fee waiver requests beginning January 1, 2022.
This statewide program provides financial support to cannabis business by waiving licensing fees if applicants and licensees meet the equity eligibility criteria set in the proposed regulation such as past cannabis convictions or arrests, reduced income or residence in an area disproportionately impacted by past criminal justice policies, as well as other criteria.
View the proposed emergency regulations, notice and supporting documents here:
The proposed emergency regulations add specificity to eligibility criteria established through SB 166 and establish a process for equity applicants and licensees to request waivers for licensing fees.
The California State Legislature allocated $30 million for equity fee waivers and deferrals and established broad statewide eligibility criteria. To focus efforts on immediately strengthening pathways to attain and maintain licensure for eligible businesses, DCC will focus the first year of implementation on waivers before implementing fee deferrals.
Rulemaking Timeline
DCC will file the emergency package with the Office of Administrative Law (OAL) after the required five-working day notice to the public. The public comment period, which lasts five-calendar days, will begin when OAL publishes the proposed regulations as being “under review” on its website:
https://oal.ca.gov/. DCC will share instructions for submitting a public comment and participating in the regulatory process when the comment period opens.
California’s Equity Initiatives
Cannabis prohibition and criminalization had a devastating impact on certain populations and communities in California and nationwide, particularly people of color. Individuals convicted of a cannabis offense, their families and their communities can suffer from the long-term collateral consequences of over policing and incarceration, including negative economic impacts on income and generational wealth development. Because of this, individuals may have a more difficult time launching a business within the cannabis industry often due, in part, to a lack of access to capital. For these reasons, fee waivers reduce barriers to entry and create additional incentives to participate in the regulated cannabis industry.
The State of California has invested nearly $90 million to support equity initiatives for cannabis entrepreneurs, including through the
Cannabis Equity Grants Program for Local Jurisdictions, which support local cannabis equity programs. More broadly, California is reinvesting directly in communities disproportionately impacted by the War on Drugs, including by utilizing funding from cannabis tax revenues through the
California Community Reinvestments Grant Program (CalCRG). CalCRG awards grants to Local Health Departments and qualified Community-based Nonprofit Organizations to support job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care for communities disproportionately affected by past federal and state drug policies.
