Cannabis Business Licensing

CALIFORNIA STATE AUDITOR 9 February 2025 | Report 2024-048 Table 1 Several Local Jurisdictions Had Many Active Provisional Licenses Remaining as of June 30, 2024 PROJECTED PERCENTAGE NUMBER OF OUTCOMES CHANGE OF PROVISIONAL OTHER THAN PROVISIONAL LICENSES NOT TRANSITIONS TRANSITION LICENSES TRANSITIONED ACTIVE FROM FROM ACTIVE BETWEEN AS OF PROVISIONAL JANUARY 1, 2023 JANUARY 1, 2023 PROVISIONAL JANUARY 1, 2023 JANUARY 1, 2026 LICENSES AS OF THROUGH THROUGH LICENSES AS OF AND AT CURRENT RATE JURISDICTION JANUARY 1, 2023 JUNE 30, 2024 JUNE 30, 2024* JUNE 30, 2024 JUNE 30, 2024 OF TRANSITION† City of Adelanto 118 30 28 60 (49)% 30 City of Commerce 19 10 8 1 (95) 0 City of 96 24 40 32 (67) 8 Desert Hot Springs County of 597 232 157 208 (65) 0 Humboldt County of Lake 171 77 86 8 (95) 0 City of Long Beach 137 72 45 20 (85) 0 City of Los Angeles 1,177 13 213 951 (19) 938 County of 765 51 156 558 (27) 507 Mendocino County of Monterey 392 230 112 50 (87) 0 County of Nevada 91 57 22 12 (87) 0 City of Oakland 305 63 94 148 (51) 85 City of Sacramento 160 105 31 24 (85) 0 City of San Diego 55 43 9 3 (95) 0 City and County of 70 34 17 19 (73) 0 San Francisco City of Santa Rosa 52 28 15 9 (83) 0 County of Sonoma 106 8 43 55 (48) 47 County of Trinity 296 137 38 121 (59) 0 Totals 4,607 1,214 1,114 2,279 (51)% 1,615 Source: Analysis of DCC’s manufacturing, cultivation, and retail and distribution licensing systems. * Other outcomes may include licenses that expire, licenses that businesses surrender, licenses that DCC revokes, or multiple licenses that merge into a single license. Also, DCC may have issued new provisional licenses during this period because state law allows it to do so for local equity applicants until January 1, 2031. Further, the cannabis businesses holding provisional licenses may have cleared all local requirements and may be awaiting DCC’s final decision on their annual state licenses. However, DCC’s database does not readily identify these outcomes or statuses. As such, these figures are estimates based on available data. † This column projects the number of provisional licenses that may not be transitioned as of January 1, 2026, by subtracting the number of licenses each jurisdiction transitioned during the 18-month period from January 1, 2023, through June 30, 2024, from the number of active provisional licenses as of June 30, 2024. As we describe in the report, we did not include those with other outcomes when making these projections. Further, a number of factors may impact the future rate of transitions, and the projections shown may differ significantly from actuals. As we discuss in the report, some jurisdictions may make significantly more progress than projected. Conversely, some jurisdictions may make less progress than projected.