There is not one legal dispensary in Los Angeles. This might seem surprising for a city with almost four million people and hundreds of currently operating storefronts. But, even the most established of these shops is not protected by a legal license.
Instead, they are allowed to sell cannabis under “limited immunity” established by Prop D. The law, signed in 2013, was meant to allow the 135 compliant LA dispensaries operating since 2007 the ability to continue to service their patient base. It was intended to be a temporary measure, but ten years on it is still the only legislation on the books that deals with regulating the cannabis industry in America’s second biggest city, estimated to be an already $1 billion dollar cannabis market set to grow to $2.5 billion in the next few years.
The vague language in Prop D and the absence of any regulating body to oversee permitting has left the city unable to properly enforce the law. “Prop D was written so poorly, it could never withstand legal challenges,” says Virgil Grant, one of the founders of Southern California Coalition, a cannabis industry group that works closely with the Los Angeles City Council to replace prop D. Legal loopholes have opened the door for daring dispensary operators to sell their products, unlicensed and undisputed. The city has conducted numerous raids and closed down scores of shops, only to see other pop up in their place.
This could all change this March. A citywide vote on March 7th will include two measures for regulating the cannabis industry. The first one was created by a group of original dispensary owners (or pre-ICO) called the UCBA. By collecting the required signatures, the UCBA was able to put a comprehensive initiative that would provide protection to the grandfathered 134 pre-ICO dispensaries.
“The problem with the UCBA’s measure in the cities eyes,” said Virgil “was that, due to the fact that they gathered signatures, they didn’t have to address any land use, community or environmental impact issues.” So, the city acted fast. They put together their own measure that would create a regulating body called Cannabis Enforcement, Taxation and Regulation Act, or CERTA. While the measure itself if quite vague, it was written in less than six weeks, it created a more sustainable solution for the city, which is already eyeing a recreational industry set forth by the passage of Prop 64.
After a number of closed-door talks with city officials, UCBA board members decided to pull support for their initiative. Due to governmental procedures, the UCBA measure will still be on the ballot, but its descriptions will indicate that it is not longer supported by the organization that sponsored it.
Angelinos strongly support turning over Prop D. A poll of Los Angeles voters conducted last summer by Eaze, a cannabis delivery technology company, showed that 66% of respondents approved of Prop D reform and over 70% support easier access to the medicine. Residents also saw home delivery as a good option, something that was illegal under Prop D.
Virgil can attest to that as well. Part of his effort to rally support for the city’s measure was to have an open forum for community engagement. “ We have really received great support from the communities. People care about this issue and want to see Los Angeles be benefited by the cannabis industry, not harmed.”
While no concrete details are outlined as of yet, city officials are weighing in on the best way to implement permitting and enforcement. Elizabeth Conway is a principle at Gide LLC, a public affairs firm that caters to the cannabis industry and emerging technology firms. She has seen a huge change in public and government sentiment towards cannabis in the past year. She proposes that technology can be harnessed to help keep governments track compliance and prevent misuse.
“The data transparency will help build the bridge back that has been distorted between law enforcement and the industry,” she told me in a phone interview. “If today’s technology had existed when alcohol prohibition was repealed, things would have gone a lot more smoothly.”
Good policy is obviously the first priority, but as was seen by the proliferation of non-permitted dispensaries resources for oversight are limited. Technology to track that cannabis and its byproducts actually get sold through legal outlets and that these sellers don’t profit from the sale to minors can bring instant accountability at very little cost.
Virgil and his colleagues at the Southern California Coalition want to make Los Angeles into an example for the rest of the country to study on legal cannabis best practices. Even with a lack of detail, their work establishing CERTA as a governing body and interfacing with communities is a good start in achieving this goal.