Although Los Angeles’ Proposition D only allows for 135 medical marijuana dispensaries to remain open, 457 dispensaries so far have filed their annual renewal paperwork to report taxable gross receipts. The city is also reportedly continuing to register new dispensaries to pay business taxes as well. At minimum, 322 dispensaries are filing tax paperwork despite the fact that they have no legal right to be open.
How many illegally operating dispensaries are there now in LA? Estimates range from 500-900, but no one knows for sure. Not all dispensaries file tax paperwork, in part because those founded since 2013 don’t want to be targeted for closure per the rules of Proposition D. Also, the fact that new dispensaries can’t legally open encourages a fly-by-night business culture. Here today, closed down tomorrow. What is perhaps more surprising is that as many dispensaries do bother to file with the city as are filing.
Tax officials actions are far more understandable. They are loath to part with any of the nearly $3 million per year in tax revenues cannabis sales taxes bring in.