To better enforce regulations, San Diego is creating a new Cannabis Permitting Bureau. This bureau may revoke permits on a substantial scale, targeting facilities and dispensaries that have violated regulations multiple times.
Previously, the city investigated cannabis businesses only after receiving complaints. Now, the bureau will have nearly $1 million each year to ramp up enforcement. It will oversee the approval of new businesses, proactively administer penalties to violators, and centralize permit approval and renewal procedures to better ensure regulatory compliance throughout the city.
Fortunately, this substantial budget means a greater allocation of resources toward the permitting process. The cannabis industry has expressed positive sentiments regarding the new bureau, as most dispensaries and facilities work hard to comply with regulations as a means of destigmatizing and legitimizing the industry.
However, the city has planned to fund the bureau using hiked fees paid by the cannabis industry. This may create an even greater gap between legal cannabis pricing and black-market pricing. As a result, more consumers may be encouraged to purchase products from unlicensed vendors, and fewer entrepreneurs will be motivated to build their businesses legally.
The Cannabis Permitting Bureau also comes at a time when the industry is struggling. Like businesses in many other industries, dispensaries have suffered under the burden of implementing COVID-19-related safety protocol. While the industry flourished at the beginning of the nationwide shutdown, this success has waned as consumers opt for delivery options rather than in-store purchases. In terms of delivery services, the legal cannabis industry faces severe competition with the black market—especially since San Diego closed hundreds of illegal dispensaries several years ago. Black market delivery services are much more efficient, as legal dispensaries must comply with a host of packaging and distribution regulations.
Financial relief during the pandemic is hard to obtain. Although cannabis is legal in many states, its federal status has prevented dispensaries from qualifying for stimulus money under the CARES Act. As the cannabis industry grows and strengthens throughout the nation, we hope to see future legislation that reflects the legitimacy of this business.
Devise a Survival Plan with Seasoned Attorneys
If you are in the cannabis industry, you are facing potentially more obstacles than any other type of business during the pandemic. At Purdy & Bailey, LLP, we want to help you navigate this fluctuating terrain. We can help you comply with city and state regulations, develop a practical business model, maintain proper licensing, and much more.