Southern California Coalition Has Big Plans for L.A.'s Pot Industry

On the evening of this month’s local elections, members of the Southern California Coalition gathered on a restaurant patio downtown. It was a clean-cut, mostly male crowd and they had come to celebrate a milestone more than 20 years in the making: a regulated marijuana industry in Los Angeles.

Virgil Grant, the organization’s president, held a tablet showing the results. It wasn’t even close. Only 20 percent of Angelenos voted, but Measure M had better than 70 percent support.

Grant, a Compton native who had his first dispensary more than a decade ago and later served six years in prison, is now president of the industry trade group Southern California Coalition (SCC) and a powerful figure in L.A. weed.

While California legalized medical marijuana in 1996, it entrusted local governments to regulate their own industries. While some cities have banned pot businesses, others including San Francisco created frameworks allowing some cannabis businesses to get licenses from the city.

The process has been slower here in the Southland. The closest approximation in L.A. has been Proposition D which took effect in 2013 and granted limited immunity to just over 130 dispensaries.

The result has led to a great deal of confusion. Hundreds of businesses not protected by Proposition D continue to operate unregulated. The city misses out on taxes, and the shops that pay taxes sometimes resent the ones that don’t.

As this was going on, the industry had no clear means to communicate its needs to the city. The SCC created a way for all facets of the industry, including shops, growers and edibles makers, to speak with one voice and establish a working relationship with local government.

Measure M was the SCC’s push to ensure that L.A. has the conditions necessary for pot businesses to thrive. Rob Rosenheck, founder of edibles company Lord Jones, said the goal is for "sensible regulation and a low tax rate to make Los Angeles the cannabis capital of the country."

Passing Proposition M was the industry’s first major victory. The city now can regulate cannabis businesses, including the taxes companies pay and zoning laws, though the specific rules have not yet been determined.

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While most in the industry agree on the general direction regulation should take, there are disagreements within the coalition. The most contentious issue, Rosenheck said, is the number of dispensaries that will be allowed. Holding the number down would likely give existing shop owners a larger share of the market. Those who want more dispensaries, including Rosenheck, say that having more shops will be more effective at stomping out the illegal market. Smaller cities such as Denver have hundreds of dispensaries.

SCC board member Ryan Jennemann, an Oklahoma native who heads cultivation company THC Design, said that with the passage of Measure M, businesses like his will be able to operate in full compliance with the law. Previously, he says he was “as legally compliant as I can be in the city of L.A.” The idea is that now his business and many others believe they can put down roots with confidence.

"L.A. has turned a blind eye to this for 21 years,” Jennemann said. “Now it’s gone the opposite route and put together the most comprehensive measure in the history of the United States."

As the SCC moves to collaborate with the city, Jennemann says there's another issue that he’ll be watching closely: zoning laws. It will be difficult for dispensaries to thrive in some areas if they have to be 1,000 feet from a church or another restricted area, he said. And laws on how far businesses must be from one another are potentially a major inconvenience for growers, who tend to cluster in industrial areas.

Regardless, the cannabis industry has taken another step out of the shadows and Southern California Coalition continues to work toward a greener future for L.A.


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