A massive licensing problem in California's cannabis industry could see the state run out of legal marijuana by this summer.
Right now, most of California's legal cannabis farms are operating under temporary licenses issued by the California Department of Food and Agriculture (CDFA). Come July, a staggering 6,924 of those temporary licenses will expire, leaving a mere 9 farms with a license to grow marijuana. Meanwhile, another 3,127 have applied for new licenses, but there might not be enough time to issue them since the CDFA takes upwards of four months to process each application.
The CDFA steps up its efforts to fast-track applications, but that's easier said than done.
"The current state of affairs is worrisome to say the least," Jenn Price - Director of State Compliance at Golden State Government Relations - told Leafly. "It isn't just an issue of whether or not CDFA can power through that many applications in the time allotted, it's whether the applications are even eligible for approval."
Each application is 44 pages long, which is a huge burden on both the farmers applying for a license as well as regulators reviewing each file. On top of that, farms must meet very strict environmental regulations, so making sure each farm is compliant will also take time.
Given those obstacles, some experts estimate that California will only have 144 licensed cannabis farms by July. So it's fair to say that California's legal weed market is on the verge of a crisis. But that crisis will likely become a windfall for the state's black market for marijuana.
"If California runs out of regulated cannabis, consumers will turn to the unregulated market, making it even more difficult for the few remaining licensed cannabis businesses to eke out a living," said cannabis attorney Omar Figueroa.
To avoid this crisis, state lawmakers are scrambling to find ways to ease the legal market's troubles. Recently, State Senator Mike McGuire (D) introduced Senate Bill 67, which would push back the expiration date of a farm's temporary license while their application for a new license is being processed. Passing that bill would be a good first step toward rectifying the problem, according to Hezekiah Allen—former Executive Director of the California Grower's Association.
"SB 67 isn't the solution to all of this, but it is critical if the fledgling market is going to survive the next year," he said.
While consumers will undoubtedly be able to find cannabis regardless of what happens with the farms, licensed dispensaries might face the same problems as marijuana retailers in Canada, who have had to reduce their operating hours, lay off their staff or even close down entirely due to the nation's cannabis supply shortage.