Why Did California Pledge $100 Million for Cannabis Companies? Nug Avenue’s Jamie Steigerwald Explains

The California legislature recently approved $100 million to help legal cannabis companies move from temporary licenses to annual ones. That’s a lot of taxpayer dollars. What will the money really do? We turned to industry expert Jamie Steigerwald, Chief Marketing Officer of Nug Avenue, to explain.

“These funds will help legal cannabis businesses establish themselves on firmer footing,” he said. “The licensing process can be expensive, time-consuming and difficult. Moving from a temporary license to a permanent one involves studying any negative environmental effects and explaining how to alleviate them. These grants will go to cities and counties so that they will be able to support businesses as they navigate this complicated process.”

Still, that’s a lot of money, so I asked Steigerwald to elaborate in an interview.

Why did the state legislature approve this plan?
Paradoxically enough, illegal cannabis operations have proliferated in California since recreational marijuana was legalized five years ago. Licensing takes a lot of time, money, and effort, so plenty of people decided not to bother. One study found that 80 percent of recreational marijuana sales took place on the illegal market in 2018.

Legal operations have been struggling to compete. Since the legal businesses are the ones that pay taxes, the state has an interest in supporting this segment of the industry. If the legitimate cannabis market succeeds, then it will generate a lot of revenue for the state. This money could go toward anti-drug programs for kids, environmental programs, or public safety initiatives.

What will this $100 million really do for the cannabis industry?
Legalization is still so new that some communities are still scrambling to process licenses and even find the necessary staff to do so. The money from this grant will be going into their coffers. Seventeen cities and counties have been identified, including San Francisco, Oakland, Long Beach, Adelanto, Desert Hot Springs, and Commerce. Los Angeles will receive the lion’s share.

These communities will be able to use the funds to hire more staff, so they will be able to provide more assistance to licensees and process applications faster. Cannabis companies that have yet to secure annual licenses should be able to move through the process more quickly and easily as a result.

In April, approximately 82 percent of California’s cannabis licenses were still provisional, rather than annual. So that’s a lot of businesses that could use the assistance.

Will the program help his own business, Nug Avenue?
As we expand and need additional licensing, we’re hopeful the process will become easier than it has been.

Thank you, Jamie!
Jamie Steigerwald is Chief Marketing Officer of Nug Avenue, the Los Angeles marijuana delivery service that specializes in hand-selected flowers. Order online within the service area, and the package will reach your front door the very same day.

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