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US (CA): State allows growers to reduce license size

The California Department of Cannabis Control (DCC) just published some new guidelines for cannabis cultivators following the passage of SB-833. Among other things, California will let cannabis cultivators reduce their canopy size and thereby reduce license costs. This will be a huge benefit. I write a lot about the woes that California's cannabis industry faces – often due to overly burdensome regulation – but in this case, I think the DCC's guidelines will have a positive impact on certain cannabis cultivators in the Golden State.

California has about a zillion different types of licenses for cannabis cultivators. They are based on size (specialty cottage, specialty, small, medium, and the relatively new large) and type (indoor, outdoor, or mixed-light). And there are separate licenses for nurseries and processors (you might think processing is manufacturing, because that would make sense, but you'd be wrong!).

Having more than a dozen different types of licenses guaranteed problems. One of those problems is that the state did not create a mechanism to easily change between license size. With the opening of large licensing in 2023, the state made it possible to go "up" in size, but not down. This was a big problem for a lot of folks in the industry.

Here's an example: imagine a cultivator got a medium indoor license (which allowed for between 10,001 and 22,000 square feet of canopy). At the time of licensure the cultivator had enough built-out capacity to have 7,500 square feet of canopy, but expected to build out another room a few months down the line. For whatever reason, the cultivator didn't have the means to complete the buildout and was stuck paying the medium indoor fee of $77,905 as opposed to the small indoor fee of $35,410.


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