A Pot Shop on Every L.A. Corner?

How the weed business is done at MedMen in West Hollywood.
How the weed business is done at MedMen in West Hollywood.
Gustavo Turner/L.A. Weekly

In the city of Los Angeles, no more than 135 pot shops are considered to be somewhat legit. They enjoy limited legal immunity under 2013's voter-approved Proposition D. But state tax officials say there are more than 900 dispensaries in the city, and some experts estimate the number could be as high as 1,500 — the vast majority of them illegal.

It isn't exactly amnesty, but there's a movement afoot to legalize at least some of them. The City Council last week approved a motion to ask voters in March to do away with Proposition D and essentially start over, leaving it up to City Hall to decide whether to license, tax and expand the cannabis game in the nation's pot retail capital. The man behind the idea, council President Herb Wesson, has essentially said he wants to license more dispensaries — and even pot producers — while possibly legalizing delivery services like Speed Weed. Those 135 shops, of course, would be a shoo-in for legalization.

Such a city-sponsored initiative, which would also tax the gross receipts of collectives and other weed enterprises, could end up competing against a more conservative March measure proposed by some of the 135 dispensaries themselves. A group called the United Cannabis Business Alliance (UCBA) has already qualified its initiative for the March ballot. It would license the 135 while allowing the council to decide on expansion. UCBA has been against legalizing third-party delivery apps.

But now it looks like the organization is willing to take a look at Wesson's proposal, ask for changes and maybe getting on board so local voters aren't split between two pot ballot initiatives. "We've got some time to make a decision" about whether to abandon UCBA's measure and join hands with Wesson, says Harvey Englander of government-relations consulting firm Englander Knabe & Allen, which represents UCBA.

"UCBA has been actively engaged with the council, working to see if there's a way we can work together on the city's proposal," he says. "We've always wanted the city to take the lead on this."

The city must figure out by Jan. 1, 2018, how to get pot shops licensed — or risk making them all illegal. A trio of state bills known collectively as the Medical Cannabis Regulation and Safety Act goes into effect on that date, and one of the key requirements of the legislation is that cities license dispensaries alongside the state. But in L.A., licensing the shops is technically illegal under Proposition D, which specifically bans pot shops while granting limited legal immunity to those 135.

At the same time, many experts are expecting the pot market to explode following last week's voter approval of Proposition 64, which legalizes recreational marijuana. A report earlier this year from New Frontier, in partnership with ArcView Market Research, says the legal marijuana revenues in California could more than double from $2.7 billion in 2015 to $6.6 billion in 2020. It's expected that medical shops that can become recreational collectives will do so as soon as the new law allows it — on Jan. 1, 2018. Much of Proposition 64's regulatory structure rides atop that Medical Cannabis Regulation and Safety Act legislation, including licensing requirements and a provision that lets cities ban pot businesses altogether, which L.A. essentially does.

Another group representing a faction of the 135 limited legal immunity shops, the Southern California Coalition, has proposed to the council initiating a pathway for licensing, expanding the number of shops and allowing legal delivery services — and a representative says it has Wesson's ear. The coalition includes perhaps the city's oldest group of legit pot shops, the Greater Los Angeles Collective Alliance.

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Englander of UCBA says the group is open to expanding the number of shops in town, but it's still against third-party delivery services. "We haven't found a lot of public support for delivery services not tied to brick and mortar operations," he says.

Even if all these interests can ultimately pass the peace pipe and bring forward one measure for voters to approve in March, they can count on a fight from politically potent neighborhood activists who said not in my backyard to dispensaries nearly 10 years ago — a stance that led to the strict limits we have today.


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