The Los Angeles City Council passed a city ordinance in June to curb the growing number of dispensaries allowed to operate in the city. Almost 450 dispensaries were sent cease and desist letters and forced to close their doors. The plan was to leave in place the 180 dispensaries that had registered with the city before a 2007 moratorium was passed.
Since 2007 wrangling between the city council, the LA County Sheriff’s department and the LA District Attorney, Steve Cooley led to a failure of enforcing the 2007 moratorium, or working out rules and regulations to govern this growing economic force of marijuana distribution centers. But with the moratorium back in place, and the new rules for the remaining 180 dispensaries, only 40 of them qualified under the new guidelines leaving a large population of Los Angeles medical marijuana users to head back to the black market.
Most of the dispensaries sent the letters have closed their doors and the economic impact has become visible. Eagle Rock, an area that emerged as the epicenter of the neighborhood activism against dispensaries was once ringed with shops that have since closed down. Most closures were volunteer, but many were closed after police force teams raided the businesses, confiscated cash, equipment and medical marijuana. An unknown number of dispensaries are now operating underground, or providing a quasi-legal delivery service for medical marijuana patients.
Several lawsuits are pending challenging the ordinance and the city is set to spend big dollars defending their position. The Los Angeles City Council is now considering a vote to change one rule in the ordinance that disqualified many of the 140 dispensaries that were opened before the moratorium. That rule said that they would be disqualified if they had any management changes over the last three years. Under the new proposal, the dispensaries could reopen if they have at least one primary owner or manager from the initial registration, leaving a small crack for many to re-qualify.
The new amendment introduced by Councilman Paul Koretz says dispensaries could remain open or reopen if they have “substantially” the same ownership or management. The lawyers representing many of the dispensaries will be following this vote very closely.
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