Two months into California’s recreational sales, state officials are having a hard time getting cannabusinesses to transition into the legal market. The Bureau of Cannabis Control (BCC) has sent out around 500 cease-and-desist letters to unlicensed cannabis companies since mid-February, according to a report from Marijuana Business Daily.
The BCC was established to oversee the approval of retailers in the state, but has said that a staggering number of businesses are still operating without their approval. In Los Angeles alone, the LAPD estimates that the city has up to 300 illegal dispensaries. This is due to a variety of factors including the complications of applying for a license, regulatory fees, and a lack of a guarantee that a dispensary will be licensed even if they do apply.
The cease-and-desist letters do not appear to be intended to reprimand these businesses but are an attempt to bring them on board with the new regulatory scheme.
“We’re going to give (the letters’ recipients) a little time to right the ship and hopefully come and seek out their license,” BCC spokesperson Alex Traverso told Marijuana Business Daily.
“If you are in fact engaging in unlicensed commercial cannabis activity,” the letters read, “you must cease all commercial cannabis operations until you obtain a valid state license to avoid further violations of state law.”
The letters go on to state that fines, greater than the initial licensing fees, could be imposed if they continue to operate without a license.
The state’s Department of Food and Agriculture, which oversees manufacturing and growth operations, has also noted a lack of licensing applications among cultivators. According to a report from the California Growers Association, the state has approved less than one percent of the growers who are currently operating.