Marijuana Business Magazine - April 2018

CANNABUS¬NESS BY THE NUMBERS ¬llegal Dispensaries & Rec Stores in Los Angeles L os Angeles – the largest marijuana market in the world – is struggling to stop unlicensed and illegal dispensa- ries from operating within city limits. It’s a problem the city has wrestled with for years. But now that California’s new legal cannabis industry is officially off the ground, licensed, taxpaying dispensaries and recrea- tional stores are being undercut by black-market operators. Taxes on recreational cannabis sold in Los Angeles hover around 35%, and consumers have shown a willingness to purchase from unlicensed businesses selling product at deeply discounted prices. Though officials have recently taken action against several illegal businesses, limited resources raise questions about the city’s ability to enforce the rule of law and ensure the success of cannabis companies playing by the rules. Here’s a closer look at the situation: Number of licensed medical and recreational cannabis storefronts in Los Angeles as of Feb. 22, 2018. Estimated number of legal and illegal dispensaries operating in Los Angeles in June 2017, according to the Los Angeles city controller. Estimated number of illegal marijuana delivery services that have sprung up since the beginning of 2018, according to Jared Kiloh, president of the United Cannabis Business Alliance, an industry association representing licensed dispensaries in Los Angeles. Number of staffers working at the Los Angeles Department of Cannabis Regulation, the agency responsible for issuing cannabis business licenses and enforcing regulatory compliance of commercial cannabis sales in L.A. 10 • Marijuana Business Magazine • April 2018