Proposed rules that would allow the city of Los Angeles to issue operating permits to more types of marijuana businesses were released by city officials Thursday, kick-starting a conversation around how the city should regulate the growing pot industry.
City officials say the draft regulation is a starting point for replacing Proposition D, a measure approved by voters in 2013 that prevents all but 135 medical marijuana dispensaries from operating in the city.
With voters in California recently opting to legalize the recreational use of marijuana, Los Angeles city officials are looking to make sure they are able to better regulate an industry that has continued to grow unabated.
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Despite the ban under Proposition D, marijuana businesses continued to proliferate throughout the city. A map pointing to the locations of marijuana businesses throughout the city was unveiled by City Controller Ron Galperin this week, showing that 756 business tax registration certificates were issued in 2016, more than the number of businesses that were supposed to have been allowed to operate under Proposition D.
City officials also hope to reap financial rewards from the pot industry, with some estimating that once the pot regulation is in place, the city could receive about $50 million in tax revenue from marijuana sales in the first year.
Councilman Paul Koretz called the release of the draft regulation “a crucial step in the city’s effort to prepare for the Jan. 1 statewide legalization of cannabis and, more specifically, to help us create a clear and enforceable set of regulations here in Los Angeles.”
The draft regulation will be discussed in at least one City Council committee hearing to be held over the next two months. The public can also send written comments to the City Clerk’s Office by emailing email@example.com
Los Angeles City Council President Herb Wesson said in the next 60 days there will be a “healthy debate of Los Angeles’ growing cannabis industry prior to final recommendations being considered by the City Council.”
“I’m calling on all residents and stakeholders to provide comments and feedback on the draft documents to ensure the pending regulations are inclusive of all communities,” he said.
The proposed rules would allow not only retail marijuana shops, but also cultivators, manufacturers, distributors and other types of pot businesses to apply for operating permits.
The rules also look to address long-running concerns that by permitting businesses to sell and deal in marijuana, the substance can fall into the wrong hands, such as those of children or people struggling with drug addiction.
The draft rules call for preventing retail storefront pot businesses from operating within an 800-foot radius of schools, public parks, public libraries, substance abuse treatment centers and other pot shops. Other types of pot businesses that do not deal with the public would not need to meet this restriction.
Retail businesses would be allowed only in commercial and industrial areas, while other types of businesses such as cultivators would generally be allowed only in industrial areas, under the draft regulation.
The Planning Department has also released maps of the proposed zones.
Pot businesses would still technically be banned in Los Angeles, under the draft rules, and those given permits would need to adhere to certain rules to qualify for “limited immunity,” a status that allows such businesses to operate without having to face enforcement actions.
City officials worked with the local pot industry, neighborhood council members, residents and others on getting the regulations drafted, a little over six months before the state is expected to begin issuing permits to marijuana businesses in 2018.
Adam Spiker, executive director of pot industry trade group Southern California Coalition, said that while their members still need to take a closer look at the draft regulation, it represents a “positive step” for an industry that has long operated in the shadows.
“They are constantly looking over their shoulders every day, wondering if somebody is going to raid them, even though they are legal under the state criteria,” Spiker said. Spiker said businesses in the pot industry want to see the rules in place “as soon as possible because they want to be regulated, they want to license, they want to be accepted member of the community frankly like any of their neighbors. This brings them a step closer.”
The coalition was a major funder of Measure M, which freed the city to repeal and replace the existing regulation under Proposition D, and allows the city to levy a 10 percent business tax on gross receipts for the sale of recreational marijuana, and a 5 percent tax for medical marijuana sales.
Ruben Honig, the executive director of the Los Angeles Cannabis Task Force, called the release of the draft rules “a great step forward for L.A.,” but he said their group is “concerned about requirements that will disadvantage key businesses and communities in L.A. and will address these issues in the coming weeks.”
Honig added that he hopes the city will ease up on enforcement efforts against existing marijuana businesses that are trying to follow the rules.
“For now, we urge the city to end the ongoing raids of cannabis businesses that are preparing to apply for licenses,” he said.