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Nearly 1,000 California Cannabis Businesses Face Government Shutdown

California cannabis

The California cannabis industry is undergoing a severe shake-up as reports are surfacing today that nearly 1,000 cannabis businesses in California have received cease and desist letters or emails. According to Marijuana Business Daily, a total of 954 firms have been subject to the warnings as of April 4th this year. 

The warnings, issued by California’s Bureau of Cannabis Control (BCC), are part of new state regulations which seek to crack down on unlicensed cannabis services.  It seems that even with the introduction of fully legal recreational marijuana, there is still the issue of cracking down on its illegal sale. 

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Yesterday, the bureau published a press release concerning the expiration of temporary licenses granted to retailers and laboratories, stating that such licenses would expire on April 30th, 2018. “If the temporary license expires,” notes the document, “the business will be required to cease operations until an annual license has been issued, as operating a commercial cannabis business without an active state license is a violation of the law.” 

According to High Times, L.A. Police officers raided a shop in February, at the time stating that they have identified 18 more like it. Later that same month, over 500 businesses received cease-and-desist orders; a number which has doubled this month. Many will see all this commotion as a little heavy-handed, considering that after all, weed is legal now. In addition, it is unclear how many of the targeted businesses are simply finding it difficult to obtain or renew licenses, rather than deliberately attempting to dodge it taxation and licensing fees.

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On the other hand, the commotion now may result in a more stable industry down the road. After all, all the state is trying to do is treat cannabis as a commodity in the same way it does with alcohol – which cannot be sold without a license either. Yet no-one would argue that legally enforcing licensed liquor stores is a hindrance to the industry. What’s more, BCC spokesman Alex Traverso has noted an “encouraging” response to the letters. 

“It’s slow going, but so far, we’re relatively encouraged by the number of people who received the letter and said, ‘OK, I’m going to get my application in,'” Mr. Traverso told KTVU News.

Despite the crackdowns, the North American Marijuana Index is up 2.26% today. 

Featured image: Luiz Meza/theavtimes.com