By John Schroyer
The city of Los Angeles is a regulatory mess when it comes to medical marijuana.
Since the passage of the statewide Medical Marijuana Regulation and Safety Act (MMRSA) last September, hundreds of MMJ businesses in the state’s most populous city have been wondering how the upcoming rules will affect them.
Because California went two decades without having any state oversight or regulations, localities – including L.A. – have had to deal with the situation themselves.
Now, L.A. officials are trying to figure out the best way forward, which may include eventually granting formal business permits to many dispensaries and other MMJ businesses still operating in the black or gray markets. That could depend on a proposed local ordinance voters may consider next year.
Marijuana Business Daily caught up with MMJ attorney Ariel Clark – chair of the Los Angeles Cannabis Task Force, a local industry group that lobbies city officials on marijuana business policies – to get some more insight on what’s happening on the ground in L.A.
What’s the current situation with Los Angeles – particularly in terms of how its regulations mesh with the new statewide rules?
In the city of Los Angeles, there’s a ban on all marijuana businesses. There’s no local permitting at all. Why this is a problem, obviously, is because under the new MMRSA, one needs to have a local permit in order to have a state license. So this is a problem that everybody across the board, from operators to the city, know must be solved in some fashion.
What the city has in place right now is called Measure D. It was voted in back in 2013, at a time when we did not have robust state regulations.
What Measure D does is provide limited immunity for a certain number of dispensary operators -round 130 at best, but probably closer to 50 – that meet certain criteria, such as having been open since 2007. It provides a limited immunity so that these dispensaries can operate, but they don’t have any permits.
What’s being done about it?
The city of Los Angeles is the biggest marijuana-consuming population in the world, certainly in the U.S., and we have the most cannabis businesses. The thing is that dispensaries are, at best, 5% of all cannabis businesses operating in the city. You have growers and manufacturers and all these other folks.
So all of these businesses are not operating legally. But for the purposes of the successful implementation of the MMRSA, the city coming in line with that is absolutely critical. It’s a big problem.
So (L.A. City Council President) Herb Wesson’s office and a couple of other council members have directed some city staff to look at this issue – acknowledging the MMRSA and the marijuana businesses in the city – to evaluate how the city should regulate these businesses. They’ll likely put an ordinance forward to the voters next March.
What’s the ideal outcome for the industry, what’s the worst-case scenario, and what do you think will actually happen?
The ideal outcome is that we would have a well-regulated local ordinance that fully reflects the MMRSA, that takes into account the particularities of the city, and that caters to local zoning issues and issues that are specific to our city. The ideal would be an equal-opportunity process to apply for and receive licensure on the local level.
The worst thing that could happen is we have no local permitting in place at all, and Measure D stands as is, meaning no one has a local permit.
The second-to-the-worst case scenario is that only a small number of business operators hold these licenses. There’s a big effort in the city to shore up a monopoly, frankly, and that’s a problem.
What do you think is actually going to happen, though?
Ultimately, I think all of us – groups from the industry as well as city officials – will work together to come up with a solution that everyone is both happy and unhappy about. Because that’s real life.
But ultimately we will have license types that are largely reflective of the MMRSA, and likely there will be some priority for dispensaries only. But there are people realizing what is at issue, which is the opportunity for an open market, for many players to participate.
Do you think that the city’s MMJ industry will basically survive unscathed over the next year and a half as the MMRSA rules are written and rolled out? Will it shrink or grow significantly?
This industry in the L.A. area and across the state is only growing, exponentially. The creative individuals and businesses that operate in our fair city – it’s an explosion and will only continue to explode.
Are MMJ businesses in LA engaging with the local political process, or would you like to see more participation by the industry there?
We certainly need to have more participation by people in the industry. But that’s going to continue to increase. A lot of that has been because of the passage of the MMRSA, and people feel more comfortable kind of coming out of the green closet. Because now we see the state acknowledging our industry, which has been thriving for the last 20 years. There’s less fear, because of that state law. And the more people understand what’s at stake in the city of L.A., the more people become activated. That’s how change happens.
This interview has been edited for length and clarity.
John Schroyer can be reached at [email protected]