Regulatory officials in California suspended 394 cannabis business permits, which makes up about five percent of the state’s entire legal cannabis supply. The permits were suspended based on a track-and-trace requirement that businesses must fulfill.
Marijuana Business Daily reports that the Bureau of Cannabis Control (BCC) on Nov. 1 issued notices to 394 retailers, delivery services, distributors and microbusinesses. Notices were sent to 63 retailers, 61 delivery services, 47 microbusinesses, 185 distributors and 29 transport-only distributors.
California is home to 7,392 licensed cannabis businesses, meaning that around five percent of licensed businesses were affected. The BCC regulates 2,630 cannabis businesses under either provisional or annual licenses. The California Department of Public Health (CDPH) regulates an additional 932 manufacturers, and the California Department of Food and Agriculture (CDFA) oversees 3,830 cannabis farmers.
The BCC sent the notices to the businesses to suspend activity until they complete mandatory track-and-trace system training and credentialing. The track-and-trace program is run by Florida-based company Metrc.
BCC Spokesperson Alex Traverso explained that businesses merely need to complete the training requirements in order to reinstate their permits. “These were just the stragglers,” Traverso said. “It turned out to be a couple extra months that we gave them. It’s just a matter of getting a password, getting a log-in and doing the training.”
But some trade organizations worry that suspensions may backfire and end up helping illegal businesses to thrive. “We’re kind of incentivizing the illicit market, which is a much more affordable option right now” for consumers,” said Josh Drayton of the California Cannabis Industry Association. “What we really need to be focused on is access and affordability.”
It remains to be seen if the suspensions will have a major effect on the health of the already-struggling legal California cannabis market.