On January 2, 2024, the California Department of Cannabis Control (“DCC”) announced plans to adopt emergency regulations to implement Senate Bill No. 833 (“SB-833”), which Governor Gavin Newsom signed into law last fall and which adds Section 26061.5 to the Business and Professions Code, relating to cannabis.

Under these regulations, beginning no later than March 1, 2024, licensed cultivators will be able to:

1. Temporarily or permanently reduce the canopy size of their respective license types;
2. Place their licenses in inactive status; and/or
3. Change their license renewal dates one time to help align the cultivator’s license year with seasonal growing practices in light of the two new options above.

To receive notices pertaining to the upcoming rulemaking described above, you can sign up to receive email notifications from DCC.

For details regarding the rulemaking process and how to provided input, you can visit the DCC’s website.

Please find a summary of SB-833 below, for your reference.  Should you have any further questions about how this legislation may affect you, please feel free to reach out to a member of our team and we will be happy to assist.

What Is SB-833?

SB-833 requires the DCC, beginning no later than the date described above, to allow a cultivation licensee to change the size type of a cultivation license and/or place such a license in inactive status.  The DCC must allow each licensee a one-time opportunity to change the date of license renewal in implementing these provisions.

Changing License Size Type

At initial renewal, a licensee would be allowed to change an existing cultivation license to a type with a smaller maximum canopy size.  At each subsequent renewal, a licensee would be allowed to either (1) restore the original type; (2) maintain the type selected at initial renewal; or (3) change to a different type with a maximum canopy size smaller than the original (which may be larger or smaller than the one selected at initial renewal).  

A provisional licensee may either continue pursuing annual-licensure requirements in connection with the licensee’s original cultivation license type or do so in connection with the smaller type selected.  

However, the DCC will not be required to allow changes to nursery licenses or to the classification of a cultivation license as indoor, outdoor, or mixed-light.

Inactive Status

Additionally, SB-833 requires the DCC to allow a licensee to place a cultivation license in inactive status at renewal.  A licensee who holds an inactive license may not engage in cannabis cultivation, but the DCC may allow such a licensee to (1) engage in drying, curing, grading, trimming, packaging, and selling cannabis harvested before the date the licensed was placed in inactive status; and (2) possess and maintain seeds and immature plants used solely for propagation to preserve the genetic lineage of the licensee’s cannabis plants.  

An inactive license must remain inactive until the next renewal; at that time (and at each subsequent renewal), the licensee may place the license in either active or inactive status.  A licensee who holds an inactive license must pay a reduced license fee in an amount to be determined by the DCC according to statute.  

Regardless of the above, an inactive license remains an official state license, and a licensee who holds an inactive license must continue to comply with all laws and regulations applicable to cultivation licensees, continue to pursue requirements for annual licensure (if the licensee holds a provisional license), and be allowed to maintain eligibility for state programs available to cultivation licensees (e.g., grant programs).

If you have any questions about any of the above, please feel free to contact Katchko, Vitiello & Karikomi, PC for more information and a member of the team will be happy to assist.

By Patrick Babajanian, January 22, 2024.