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L.A. dispensary boom may be a thing of the past

By Greg Aragon

Looks like the Gold Rush days may be over for the cannabis-club industry in Los Angeles.

The L.A. City Council is cracking down on medical-marijuana dispensaries, and cracking down hard

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By Greg Aragon

Looks like the Gold Rush days may be over for the cannabis-club industry in Los Angeles.

The L.A. City Council is cracking down on medical-marijuana dispensaries, and cracking down hard. Over the past two months, more than 50 cannabis clubs have been ordered closed by city officials, with hundreds more poised to be shuttered soon.

Los Angeles is home to more than 700 medical-cannabis dispensaries, the vast majority of which opened via a loophole in the city’s November 2007 moratorium on new dispensaries. The moratorium allowed 186 existing cannabis clubs to stay open provided they register with the city, and included a clause allowing dispensaries claiming the law posed an undue hardship to operate pending review of their claim.

Hundreds of dispensary owners seized upon that clause to open operations throughout the city. Seemingly overnight, L.A. became the most dispensary-laden city in the world, drawing international media attention – and the almost inevitable wrath of the L.A. City Council. The council ended the exemption in June, and officials are now steadily reviewing each of the hundreds of hardship claims before them – and dropping the ax on dispensaries when the claims are denied.

“I think this is terrible,” says Bruce Margolin, director of the Los Angeles chapter of California NORML. “State law requires that marijuana be available to patients and the City Council is depriving patients of needed medicine. They should be as supportive as possible.”

But L.A. City Councilman Dennis Zine, one of the panel’s driving forces behind the crackdown, says the hardship loophole made a mockery of the city’s efforts to put the brakes on new dispensaries.
“The plan was that nothing would open after that 186 [number], but [people] found a hardship exemption and used it as an excuse to open,” Zine says. “They violated the premise of what we are trying to do with medicinal marijuana, they abused the system, and they hurt legitimate medicinal marijuana facilities.”

Matt Cohen, owner of The Natural Way of L.A. cannabis club, says the loophole created a “repeat of the 1849 California Gold Rush, but instead of gold, the product was marijuana.”

Cohen would like to see the council cull the number of dispensaries not only for business reasons, but also out of concern for public perception.

“On my street, Pico Blvd., there are three clubs who are officially legal as of September 2007,” he said. “But in the last five months there have been 10 that have opened on this six-block strip. It’s completely out of hand.”

He says too many dispensaries in an area can make people nervous.
“If you are a home owner in the neighborhood and you notice that one out of every three businesses is a medical marijuana dispensary, I don’t know how you are going to feel about that unless you yourself are a patient,” says Cohen.

City officials say any dispensary that opened after the 2007 moratorium by filing a hardship claim may be closed if the claim is rejected.

“Just because you filed an application does not give you a green light to open up a facility,” said Councilman Ed Reyes. “And applying for hardship exemption does not equate to opening a facility without a permit.”

James Catipay, director of Herbalcure Cooperative in Los Angeles, said he feels sorry for people that opened a dispensary under the hardship exemption, and may now have to close down. “But if it is this easy to open one up, I don’t know why I spent the last two years trying to follow the rules,” he says.

Councilman Zine says he wants to close all dispensaries that wrongly exploited the hardship exemption.

“If I could have 24-hour hearings seven days-a-week, that’s what I would do,” he says. “And those that have a legitimate hardship, we would permit to remain open and those that don’t will be closed.”
But Margolin disagrees with the view that the number of dispensaries around Los Angeles has gotten out of hand.

“As long as there is a demand, there should be a supply,” he says. “If you close them down, all you are going to do is have more people on the street dealing in that capacity, which is not of benefit to anybody concerned.”

Bruce Mirken, director of communications for the Marijuana Policy Project, says the council’s desire to regulate the number of dispensaries in the city was “perfectly reasonable,” but he added that the city needs to draw up a permanent set of rules for everyone. He suggested the city follow San Francisco’s lead.

“San Francisco put together a good set of rules,” he says. “They had public hearings and public input, and they did allow a mechanism where if someone had trouble complying with the requirements they could get extra time to comply. There is nothing wrong with having a set of rules for the road, but it has to be an orderly process, and that’s the part that L.A. hasn’t managed”

Los Angeles is putting together such a set of rules now, Reyes says. As the council continues to review hardship applications on a “case-by-case” basis, he says, city officials hope to have a final document on requirements for dispensaries ready for council vote sometime in September.

In the meantime, he adds, dispensaries with denied applications should watch out because building and safety inspectors will be putting notices on their doors. Owners who refuse to close face fines of $2,500 a day and up to six months in jail, Reyes says.

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