San Francisco proposes ordinance allowing cannabis permit holders to transfer ownership stakes

In a recent San Francisco County government meeting, officials discussed a proposed ordinance aimed at easing restrictions for cannabis businesses operating under temporary permits. The ordinance would allow these businesses to transfer more than 50% of their ownership to new investors, provided they have been waiting for at least five years since applying for a permanent cannabis business permit.

Currently, temporary permit holders, which include cultivators, distributors, manufacturers, and testing laboratories, face significant limitations. They are unable to sell more than half of their ownership until they receive a permanent permit, a process that has been delayed for many since they applied back in 2018. This has left many businesses unable to engage in essential ownership transactions, hindering their growth and stability in a competitive market.

Jackie Thornhill, a legislative aide, emphasized the importance of this ordinance, stating that it would provide much-needed relief to a struggling industry. The change aims to align temporary permit holders with other cannabis businesses that can freely manage ownership changes. The ordinance also includes provisions for enforcement, allowing business owners who mistakenly exceed the ownership transfer limit to rectify the situation within six months under the supervision of the Office of Cannabis.

Director Nikesh Patel supported the proposal, noting that it specifically targets the approximately 55 temporary permit holders currently affected by these restrictions. The meeting concluded without public comment, and the committee moved to recommend the ordinance to the full board for approval.

This proposed change reflects the city’s ongoing efforts to support the legal cannabis industry and address the challenges faced by businesses that have been operating in a complex regulatory environment. If passed, it could pave the way for more equitable treatment of cannabis businesses in San Francisco, fostering a more robust and compliant market.