Dark clouds are gathering on the horizon in California, where a renewed federal crackdown and a potential ban on cannabis dispensaries in Los Angeles have set the MMJ industry on edge.
The developments add a new layer of uncertainty to the state’s medical marijuana industry and threaten to drastically alter California’s MMJ landscape. Dispensary owners and other cannabis professionals must now brace for the likelihood of a continued large-scale contraction that will lead to hundreds – if not thousands – of job losses.
Earlier this week, the government took action to shut down several dozen California dispensaries that it says are operating outside the boundaries of state MMJ laws. It marks the next phase in the Obama administration’s efforts to rein in the medical cannabis industry ahead of the November elections. Federal officials have indicated that they will continue to target dispensaries and cultivation operations going forward, stressing that this week’s actions are part of a multi-pronged effort.
As if that wasn’t bad enough for the state’s MMJ industry, a second City Council committee recommended today that Los Angeles implement an outright ban on dispensaries until the state Supreme Court weighs in on the legality of such operations. The measure will now head to a full City Council vote, which could come in the next few weeks. Passage of the proposal would wipe out scores of dispensaries and related cannabis businesses in what has long been the biggest MMJ market in the country.
The potential collapse of the medical cannabis industry in Los Angeles and other cities across California – such as Santa Barbara – underscores the importance of having a state regulatory system oversee dispensaries. While California pioneered the MMJ business, it also allowed the industry to grow largely uncontrolled, leading to a proliferation of dispensaries and grow operations that are abusing the law. And now the entire MMJ community in the state is paying for it.