L.A.'s Legit Pot Shops Want to Corner the Recreational Weed Market

L.A.'s Legit Pot Shops Want to Corner the Recreational Weed Market
Gustavo Turner/L.A. Weekly

In November California voters will have a chance to legalize recreational marijuana — and speculators are licking their lips at the prospect of a green rush in the Golden State. One analysis says California's legal pot revenues could more than double — from $2.7 billion in 2015 to $6.6 billion in 2020 — if we fully legalize cannabis.

But in the biggest marijuana market in the United States (the city of Los Angeles has more dispensaries than the entire state of Colorado), the industry's growth could lag, even if recreational weed is passed by voters.

An organization that represents the majority of legit (medical) marijuana shops in L.A. is pushing to cap the city's number of dispensaries — medical or not — at 135. The organization, the United Cannabis Business Alliance (UCBA), has just filed its initiative language with the L.A. City Attorney's Office and is aiming for the March ballot. It would allow today's city-tolerated dispensaries to switch to selling recreational pot.

Those shops are commonly known as pre-ICO, for "interim control ordinance." In 2013 voter-approved Proposition D gave those circa-2007 retailers limited legal immunity from prosecution, though they were never expressly legalized. In fact, Proposition D outlawed pot shops and prohibited pot delivery services.

A trio of bills known as the Medical Marijuana Regulation and Safety Act, signed by Gov. Jerry Brown in December, requires local licenses for pot shops, something L.A. law does not currently afford the pre-ICO dispensaries.

UCBA's similarly named Los Angeles Marijuana Regulation and Safety Measure would make the 135 pre-ICO retailers legal, give them permits, allow new shops to open if old ones close and let only the pre-ICO dispensaries transfer to recreational sales. It also would give the City Council some leeway in expanding the number of dispensaries.

The measure would establish a pot regulation department within City Hall. It would continue to disallow delivery. And it would hit illegal competitors with $10,000 a day in fines. 

Those competitors are many. The California Board of Equalization said last year that there were 935 weed retailers in the city. Other experts have estimated there are more than 1,200.

The office of City Attorney Mike Feuer has disputed those numbers. It reported in May that 763 illegal dispensaries have been shut down since Feuer took office.

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Whatever the number is, illegal shops want to be legalized, especially if voters approve recreational marijuana. UCBA's Los Angeles Marijuana Regulation and Safety Measure, however, would keep that pot of gold for the pre-ICO shops, at least in theory.

Los Angeles City Council president Herb Wesson has proposed that the city look into placing its own measure on the ballot that would license local dispensaries. The councilman also is open to legalizing delivery services and expanding the number of weed businesses in town.

Meanwhile the City Attorney's office needs to approve the UCBA measure's title and summary, and the City Clerk needs to review the language, before organizers can begin collecting signatures. If enough signatures from registered city voters are turned in and verified, the measure can be sent to the March ballot or approved on the spot by the City Council.

Harvey Englander of government-relations consulting firm Englander Knabe & Allen, which represents UCBA, says he expects the initiative to get to the ballot without the City Council rubber-stamping it.

"We're expecting to run a campaign," he says.

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