In March, L.A. voters overwhelmingly approved Measure M, giving the City Council permission to regulate the marijuana industry in the world’s biggest market. But industry leaders worry that the council’s proposed rules, released earlier this month, could force cannabis companies to relocate to more amenable cities, taking their jobs and tax dollars with them.
The proposed rules are up for a 60-day public comment period.
Marijuana industry insiders' main complaint is that while Measure M empowered the City Council to regulate the industry, the proposed rules would not give cannabis businesses full legal standing. Instead of licenses or permits, the draft regulations offer “certificates of compliance.”
The certificates, according to a spokesman for L.A. City Attorney Mike Feuer, would affirm that a business has met certain requirements, such as being far enough from schools, but do not signify “the city’s ‘approval’ of the business’ cannabis activity.”
To marijuana businesses, this seems a lot like 2013’s Proposition D, which Measure M is supposed to replace. Proposition D grants limited immunity to 135 L.A. dispensaries but does not give them the legal standing of licensed businesses. The new draft rules would allow more kinds of businesses, such as growers and manufacturers, to obtain certificates, but no business that touches the plant would be eligible for full licensure.
Some in the industry worry that the certificates would not enable them to apply for all-important California state licenses, an application process expected to begin next year. According to the city attorney’s office, the certificates will be sufficient to apply for state licenses.
“You have all these other cities and counties across the state that are creating actual permits,” said Ariel Clark, a Sherman Oaks cannabis lawyer and chair of the L.A. Cannabis Task Force industry group.
The draft rules are “a product of an old guard within the city,” Clark said. “We need to see some revisions.”
Jerred Kiloh, owner of Sherman Oaks dispensary Higher Path, calls the discrepancy between licenses and certificates “one more buffer in case the federal government comes in and wants to hold the city accountable.”
Fears of federal raids grew recently after marijuana journalist Tom Angell broke news that U.S. Attorney General Jeff Sessions sought permission from Congress to prosecute medical marijuana businesses.
Since 2014, a protection known as the Rohrabacher-Farr amendment has blocked the U.S. Justice Department from using its own money to prosecute state legal marijuana businesses. Sessions asked Congress not to renew the amendment when it expires in September. It's not clear whether Congress will comply.
The L.A. City Council’s rules also would require growers and manufacturers applying for licenses to prove that they were operational before Jan. 1, 2016. Such information, Clark said, “could be used as fodder to raid people.”
Beyond worries about law enforcement, cannabis figures have a host of additional concerns with the draft.
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The proposal would not allow the use of “volatile” solvents such as butane gas. Some consumers prefer concentrates extracted with butane, but the process has become notorious for occasionally causing houses to explode. Butane gas is invisible and heavier than air, so it can pool on the floor until a spark ignites it.
Virgil Grant, a founder of industry group the Southern California Coalition, says manufacturers in the city use volatile chemicals to make coffee, toothpaste and makeup, among other products, and argues that they’re not dangerous when handled by professionals.
Grant also points out that the proposed rules have a long way to go if they’re going to fulfill Measure M’s objective to create jobs and ownership opportunities for minority communities who have suffered disproportionately from the war on drugs.
The 51-page draft dedicates one paragraph to the social equity program. It fails to say who will be eligible for equity benefits or what those benefits will be. "We are not satisfied with that small paragraph,” Grant said.