California cannabis regulators are starting to dole out annual licenses to sell marijuana – and a handful of local pot shops are among the first crop of licensees.

Since the beginning of 2018, California cannabis regulators have been issuing temporary licenses valid for 120 days, plus additional extensions. But the Bureau of Cannabis Control, the agency that regulates certain cannabis businesses like retailers, distributors and event organizers, will stop issuing or extending those temporary licenses after December 31, 2018.

Four shops in Cathedral City and Palm Springs – Dank Depot, No Wait Meds, Atomic Budz and Leef Industries – are among the first ten companies to get annual retail licenses in California, according to the Bureau of Cannabis Control.

Leef Industries owner Kort Potter said he’s humbled to get one of the first annual licenses.

“I feel like a lot of eyes are gonna be on us,” he said.

The Bureau of Cannabis Control has issued more than 1,200 active temporary licenses as of Nov. 2. Industry observers greeted the first annual licenses as a welcome sign of progress, even while recognizing many cannabis companies have a long way to go before they can get compliant with still-evolving state regulations. As recently as October 2018, the Bureau of Cannabis Control has published changes to proposed rules, including expanding the definition of ownership of a cannabis business and updated packaging standards.

“A sigh of relief is probably a good way to explain it,” said Jordan Wellington, Chief Compliance Officer at Simplifya, a Denver-based software company that serves the cannabis industry. “There have been a lot of concerns that (the Bureau of Cannabis Control) was not going to get annual licenses issued.”

Wellington said the costs of applying for a cannabis license in California – as well as uncertainty as state regulations continue to shift – have disincentivized many cannabis businesses from seeking state licenses at all. But in the Coachella Valley, where many local cities have passed frameworks for weed shops to get local licenses, Wellington said pot businesses are already “better positioned” to transition to annual licenses than in parts of California where counties or municipalities haven’t created a local licensing system.

Jason Elsasser, President of Coachella Valley Cannabis Alliance Network, said the Coachella Valley still has a head start in California because some cities had already established medical cannabis regulations, and even pro-actively established adult-use cannabis regulations, prior to adult-use cannabis sales going live in 2018.

“The uniqueness would be that a lot of the cities here have established marijuana licensing before there was state licensing, so we’re ahead of the curve,” he said.

He said the early start has given municipalities like Cathedral City and Desert Hot Springs a chance to fine-tune their cannabis ordinances, exploring new business opportunities like cannabis lounges or adjusting local cannabis taxes.

“The fact that they’re moving forward and there isn’t significant delay is a really good thing,” he said.

For Potter, the owner of Leef Industries in Palm Springs, now the real work begins: Staying compliant with the law.

“I definitely don’t feel home free,” he said. “There’s a long road ahead.”

Thanks to Amy DiPierro covers business and real estate for The Desert Sun in Palm Springs. Reach her at 760-218-2359 or amy.dipierro@desertsun.com. for content share