July 3, 2013

Los Angeles Drawing Line in the Sand as it Looks to Close Hundreds of Marijuana Dispensaries

Los Angeles Medical Marijuana

Los Angeles is getting serious about enforcing a new law intended to drastically reduce the size of the medical marijuana industry.

Several weeks ago, it sent out warning letters to hundreds of dispensaries across the city, telling them to close per a voter-approved law or risk prosecution.

Now, the City Attorney’s Office is upping the pressure further, releasing an official list of the 134 centers that are authorized to stay open going forward (you can see them all here).

The message is clear: Any dispensaries not on the list have to shut down.

The moves are tied to a law that went into effect last month requiring most of the city’s MMJ centers (estimated at between 800 and 1,000) to close. Under the measure (Proposition D) approved by voters in May, only dispensaries that were registered with the city prior to a 2007 moratorium – and then registered again in 2011 – can stay open.

Many dispensaries have already shut down or are preparing to do so, but hundreds more have not. Some are hoping to fly under the radar, thinking that the city simply doesn’t have the resources to completely enforce the new law. Others are openly defying the ban and are considering legal options to challenge it. And a handful said the new rules are confusing, saying that they aren’t sure if they qualify to stay open or not.

Now, however, the city has drawn a distinct line in the sand, making it very clear which dispensaries it considers “legal” and which ones need to shut down. Those that don’t close face fines and possible criminal charges.

The question now is whether there the new law has any teeth.

The city has tried and failed miserably to enforce bans, restrictions and other moves to rein in the industry in the past, suffering from a lack of political will and resources. This time could be different, however.. Now there is a clear directive (approved by voters, no less) for the city to follow, and a recent Supreme Court decision giving cities the right to enact such bans clears up the legal ambiguities that once existed. Additionally, the warning letters have spooked landlords, and some dispensary owners who wanted to defy the ban have been booted from their buildings and can’t find another space. And the city could look for help from the feds, which have already been cracking down on Los Angeles dispensaries that they believe are violating state laws as part of a broader crackdown in the region.

So the majority of dispensaries could very well close, one way or the other.

Or they could morph into a new business model: Some have converted to delivery-only services and “mobile” dispensaries, the legality of which is unclear. Other dispensary owners forced to close are hoping to relocate to other parts of the state.

Aside from capping the number of dispensaries, the new law also raises the taxes dispensaries must pay – to $60 for every $1,000 in sales, vs. $50 before – limits operating hours to between 10 am and 8 pm, requires background checks for owners/managers, and forces dispensaries to be at least 1,000 feet from schools and parks.

One Comment:

  1. To easy for the city to be corrupt….I would challenge if I had a storefront…

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