L.A. Weighs an Expansion of the Lucrative Marijuana Business

L.A. Weighs an Expansion of the Lucrative Marijuana Business
File photo by Timothy Norris/L.A. Weekly

UPDATE at 4:54 p.m. Wednesday, May 18, 2016: The motion was assigned to a committee for its review. A public hearing is expected in the weeks to come. Details are below. First posted at 5:40 p.m. on Tuesday, May 17, 2016.

Los Angeles City Council president Herb Wesson is planning to introduce a motion that will direct city staffers to explore a ballot measure asking voters to amend marijuana dispensary rules and possibly legalize back-end cannabis businesses in town.

Wesson's motion asks city attorneys and other staffers to weigh ballot language that would "extend Proposition D's gross receipts tax to all marijuana-related businesses."

Proposition D, approved by voters in 2013, outlaws weed retailers but gives limited legal immunity to 135 or fewer dispensaries that had been registered with the city since 2007. The motion is expected to be introduced at tomorrow's City Council meeting, Wesson's office says.

The council president is being lobbied by cannabis interests concerned that the city's medical pot rules are not in sync with California's Medical Marijuana Regulation and Safety Act (MMRSA), which was signed by Gov. Jerry Brown in December.

MMRSA requires state and local licenses for dispensaries. L.A. pot retailers are explicitly outlawed under Proposition D. Even those given limited legal immunity are not granted permits.

Assemblyman Reggie Jones-Sawyer is trying to address the issue with a bill, AB 2385, that would ask the city to provide verification that license-seeking dispensaries in the city are part of the 135 with limited legal immunity. The bill would waive the local licensing requirement for Los Angeles.

The bill is headed for a full vote of the Assembly, said Charles Harvey, legislative director for the L.A.-based lawmaker.

Wesson's action seeks much of the same, if not more. It asks city staffers how a measure could be worded so that dispensaries would be compliant with MMRSA's licensing system.

It also ponders "increased penalties and enforcement to close down all illegal marijuana-related businesses," according to the motion's language.

The measure would "create a framework for the city" to regulate recreational cannabis businesses should the statewide Adult Use of Marijuana Act (AUMA) pass in November, it states.

That initiative bases much of its proposed regulation on MMRSA. Experts say that licensed or limited-immunity dispensaries in L.A. would be in a position to take over recreational sales.

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AUMA, backed by Lt. Gov. Gavin Newsom and Silicon Valley billionaire Sean Parker, seeks to legalize the possession of up to an ounce of pot for those 21 and older. It also would impose a statewide weed tax.

A key part of Wesson's proposal is exploring the extension of taxes to all marijuana-related businesses. 

MMRSA requires that cultivators, edibles makers and other marijuana businesses also obtain state and city licenses. 

If L.A. doesn't get in that game, it could lose out on a lot of tax money, particularly if AUMA passes and another economic green rush hits Southern California.

"The city of Los Angeles should explore financial opportunities associated with the recreational use, cultivation, distribution, manufacturing, processing and testing of marijuana," Wesson's motion says.

It's not clear whether other City Council members have an appetite for changing Proposition D. The measure was inspired, in part, by influential neighborhood activists who had little tolerance for pot shops in their neighborhoods.

Wesson's motion gives staffers 60 days to report back on "options" for placing a Proposition D remix on the March 2017 ballot.

MMRSA's licensing requirements take effect in 2018.

UPDATE at 4:54 p.m. Wednesday, May 18, 2016: The motion was assigned to the City Council's Rules, Elections, Intergovernmental Relations and Neighborhoods committee for review. A spokeswoman for Wesson says it will get a public hearing at some point. We'll keep you posted.


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