California suspends hundreds of marijuana supply businesses

California has suspended 394 marijuana business permits in a move critics say will temporarily reduce the number of legal cannabis shops in the state.

Marijuana Business Daily in Colorado reported the suspension affecting about 5% of California's legal cannabis supply chain comes after the businesses failed to complete mandatory training and credentialing.

The state Bureau of Cannabis Control says the suspensions include retailers, distributors, delivery services, and microbusinesses that haven’t completed track-and-trace system steps.

The system involves uploading business inventory data so state regulators can keep tabs on the cannabis supply chain via Florida-based Metrc's software.

Officials say the companies must cease all sales transactions until their licenses are reinstated.

Some industry members say the step could provide a boost to the illicit cannabis market.