The Los Angeles City Council voted this week to bar officials from giving business tax certificates to new medical marijuana dispensaries, all of which are technically illegal under an ordinance voters passed two years ago.
Council members also want to force existing dispensaries renewing their registrations to attest under penalty of perjury that they meet the requirements of that ordinance (Proposition D), which only allows older MMJ businesses to operate, the Los Angeles Times reported.
City finance officials who hand out the tax certificates have asserted they aren’t authorized to investigate the legality of a business, and instead they take companies at their word, according to the Times report.
When voters approved Proposition D, city officials estimated that only around 130 dispensaries would qualify to remain open. Yet 447 marijuana businesses have renewed their registrations to pay business taxes this year, obtaining official certificates from the city, according to the Times.
In other words, scores of dispensaries are violating the law and remain open, and the city is giving the businesses legitimacy by granting them tax certificates.
Los Angeles has collected $4.4 million in taxes from dispensaries this year, the Los Angeles Daily News reported.