In a proposal that was widely panned by pot shops and legalization advocates, the city in June revealed possible regulations for Los Angeles cannabis businesses that would have continued the problematic policy of treating even the most legit enterprises with “limited legal immunity.”

Many cannabis folks were up in arms. Voters in March approved Proposition M, which was pitched as an initiative that would finally grant licenses to weed sellers and producers. But the measure ultimately left the fine print up to City Hall. The groups representing collectives in town opposed the limited-immunity approach in proposed regulations forwarded as a way to implement M. This week, City Council president Herb Wesson submitted additions to those regulations that would endorse full licenses for pot businesses.

Wesson requested the changes in a letter to the city's planning director. The proposed rule changes will be weighed by the Planning Commission in September before heading to the full City Council for its consideration. “After a complete and thorough review of the relevant legal issues, a licensing/permitting system as indicated in Proposition M that provides certainty under the zoning code is the best and only way to proceed toward regulating the commercial cannabis industry,” Wesson wrote.

“After carefully listening to Angelenos, we have requested adjustments to our draft ordinance that reflect the concerns voiced during the 60-day public comment period,” Wesson said via email. “We will continue to weigh different viewpoints in the coming months to regulate this emerging industry and protect city residents in the best way for Los Angeles.”

Marijuana business groups appeared to be elated.

“The members of UCBA [United Cannabis Business Alliance] are heartened by the thoughtful letter from council president Wesson,” Javier Montes, vice president of the trade association, said via email. “It is clear he has heard from the public at large and understands that a license is essential to a successful launch of the cannabis industry in Los Angeles.”

In a phone interview, leaders of the organization appeared to be confident licensing would become the law of the land for legit cannabis concerns in the city. “It's a clear step forward,” Montes says.

Adam Spiker, executive director of the Southern California Coalition, the largest marijuana business organization in town, argues that the limited legal immunity approach established under voter-approved Proposition D in 2013 backfired for legit dispensaries because it created a legal gray area without protections for good actors. He said the number of fully illicit shops has mushroomed; many claim to be legal because the definition of “legal” is so murky. Some even proudly displayed tax certificates issued by the city before the City Council pulled the plug on issuing such documents to illegal storefronts last year.

“If you're going to take their taxes, you also have to give them the same protections as other licensed businesses,” Spiker says. “We need to make it clear who are the legit operators under Proposition M and who aren't, so that law enforcement and the City Attorney's office know who to go after and treat like a regular licensee.”

Indeed, pot shop operators have long been hoping for a new day in which they could proudly flaunt licenses or permits that would repel police. California's Medical Cannabis Regulation and Safety Act (MCRSA) originally contained what Gov. Jerry Brown called a dual-licensing system, where city permits would be required. That's essentially how Proposition M, placed on the ballot by the City Council, was pitched to voters.

But the final version of those state rules nixed the local licensing requirement, and the June rollout of L.A.'s own proposed regulations reverted to the “limited legal immunity” model.

The Los Angeles rules were intended to allow not only medical marijuana shops but other businesses, including growers and product producers, to achieve legality in the city under the state's own laws. It's also expected that some if not most retailers will switch to recreational cannabis sales for the 21-and-older crowd, approved by voters under California's Proposition 64 in November.

Wesson is proposing another change to allow “safe volatile manufacturing” in the city. June's proposed regulations would have outlawed the predominant process for creating a concentrated marijuana products like dabs, wax and oils used in vaporizers. The products have rapidly gained in popularity at dispensaries and are responsible for 30 percent of sales statewide, according to one estimate. The rule would have essentially shut out the making of such products in L.A., critics said.

In recent years, there have been several explosions stemming from amateurs using butane to extract concentrated THC from marijuana. But industry experts say extraction can be done safely if it's regulated like other industries that use volatile chemicals. Wesson agrees, saying in his letter, “I am confident that the city of Los Angeles has the inspection, safety and regulatory expertise to allow for safe volatile manufacturing.”

“It's something we've been supportive of,” says Montes of the UCBA. “This type of manufacturing has been
done in various other industries for decades.”

Wesson is asking that the draft regulations be considered on an emergency basis so that city license applications will be available late in the year, ahead of the expected rollout of state licenses in January.

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