More than 450 medical marijuana dispensaries have filed renewals to pay Los Angeles business taxes this year -- more than three times as many as are allowed to stay open under Proposition D.
The new numbers won't settle the debate over exactly how many medical marijuana dispensaries are now operating in Los Angeles. Additional pot shops may be open but have fallen delinquent on their taxes. Some may have never registered to pay taxes.
But the numbers provide the latest hint at what has happened after Los Angeles voters passed new rules attempting to restrict which medical marijuana dispensaries can operate -- and how -- across the city.
Before Proposition D passed last spring, police estimated there were roughly 700 dispensaries, though others pegged the number much higher. Fewer than 140 medical marijuana dispensaries are eligible to stay open under the new rules, according to city estimates.
Earlier this year, City Atty. Mike Feuer announced that more than 100 pot shops had shut down since the new rules went into effect. But when reporters asked Feuer exactly how many medical marijuana collectives were still operating in its city limits, the city attorney said he had no way of knowing.
Tax records have offered one clue: More than 1,100 medical marijuana collectives are actively registered to pay business tax in Los Angeles, according to figures released earlier this year by the city finance office. The Greater Los Angeles Collective Alliance, a voluntary association of medical marijuana collectives, estimates that when duplicate registrations are excluded, that number falls below 900.
However, it’s unclear if that many medical marijuana dispensaries are actually operating in Los Angeles. A business may obtain a registration certificate but never actually open. It might also close but fail to notify the city. On the flip side, some pot shops might have never registered to pay taxes.
The newly released numbers offer another hint at how many medical marijuana businesses are currently operating: After registering, Los Angeles businesses must file an annual renewal to report their taxable gross receipts. So far this year, 457 medical marijuana collectives have filed a renewal, according to Office of Finance General Manager Antoinette Christovale.
Feuer said it was still impossible to know for sure how many pot shops were open but heralded the new figures as "a sign of continued progress." The numbers are much lower than estimates of the number of medical marijuana businesses open before Proposition D, Feuer said Tuesday.
"My impression overall is that fewer are operating now," said Don Duncan, the California director of Americans for Safe Access, which advocates for safe, legal access to cannabis for therapeutic use. "But it's so hard to quantify."
Others questioned whether the tax renewals are a good measure of how many shops are open. "People are aware that they're being targeted for enforcement and they're refusing to renew," said David Welch, an attorney who represents clients in the medical marijuana industry. "I don’t think it should be used as an indication that medical marijuana collectives are closing down."
The city has continued to register new medical marijuana collectives to pay business taxes. Earlier this year, the Office of Finance reported that after the new law went into effect, it had registered nearly 200 pot shops with no previous records in the tax system; Feuer has warned shops that "if they've opened for the first time since 2013, they can't be lawful under Proposition D and ... are subject to prosecution."
Under Proposition D, medical marijuana dispensaries and the landlords who lease space to them can be prosecuted if the shops don’t meet several requirements, including being registered under past Los Angeles ordinances and being located the required distance from public parks, schools and other facilities.
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