Fixing the world’s largest cannabis market

Three years ago this month, voters in the city of Los Angeles passed Proposition D. Well, some voters did anyway. This compromise ballot measure was put forward by the City Council after operators and activists gathered signatures and qualified their own measure, then known as Proposition E. The city liked what was there and added a tax on top, then called it Proposition D. Yet another group of industry operators had gathered signatures and qualified a Proposition F to compete for voters’ attention.

Not that many voters were paying attention, as only a quarter of registered voters bothered to show up and cast a ballot. What’s more, a quarter of those who voted didn’t bother to vote on any of the medical cannabis ballot measures. In the end, just over 10 percent of Los Angeles’ registered voters ended up supporting Proposition D while close behind six percent of registered voters supported the more permissive Proposition F. This was hardly a mandate from the voters, and shouldn’t be taken as the final statement on how to regulate L.A.’s sprawling retail, delivery, cultivation and manufacturing industries. In fact, it didn’t really regulate anything at all, as it actually created a ban on medical cannabis businesses in the City of Los Angeles but offered limited immunity from prosecution to a mere 134 retail collectives. No operation is granted a clear license, no operation is authorized to continue doing business, leaving most operators nervous about complying and yet these collectives continue to be depended upon by patients every day.

“No operation is granted a clear license, no operation is authorized to continue doing business, leaving most operators nervous about complying and yet these collectives continue to be depended upon by patients every day.”

In discussions with elected officials of L.A. (and throughout California) I hear over and over the firmly held belief that medical cannabis dispensaries are inherently nuisances, a business activity which should be kept clear from residential and sometimes even commercial areas. Throughout California, elected officials are fearful of an unregulated cannabis market, seeing hundreds of unregulated cannabis shops in Los Angeles and fearing that this chaos will come to their town as well. California is perceived as the cannabis Wild West by national observers largely because of the unregulated nature of the L.A. market alone. A fix has got to come; the largest cannabis market in the world has got to be able to better organize itself.

This fix might be at the state capitol right now, as AB-2385 has been offered up as a partial solution by Assembly member Reggie Jones-Sawyer. The fix might more properly be found at City Hall, as the city has decided to stop issuing new Business Tax Registration Certificates which are said to be confusing to landlords. More proposals from the City are needed, and ultimately it may be an issue before the voters of Los Angeles again. Whatever solution, though, should be arrived at after studying the existing marketplace and how the supply chain functions now, within L.A. and for vendors transporting into L.A. Our robust industry now has professional delivery operators, delivery mobile applications, a highly sophisticated manufacturing sector, quality assurance testing laboratories, and a soon-to-be mandated distributor role. If we are going to spend the time and effort to fix L.A.’s regulations, we should allow for a pathway to licensure for these existing businesses and avoid disrupting the provision of medical cannabis to patients.