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California begins licensing recreational marijuana sales next month. But most won't see pot shops in their city anytime soon

California begins licensing recreational marijuana sales next month. But most won't see pot shops in their city anytime soon
Grant Palmer, left, helps Hope Parks with purchases at the Canna Cruz medical cannabis dispensary in Santa Cruz, Calif. (David Royal / For The Times)

California's march to marijuana legalization hits its stride next month when the first state-issued licenses take effect for sales to recreational users. But most Californians won't see pot shops springing up in their neighborhoods any time soon — and some may never see them in their communities.

To sell marijuana in California, retailers have to be licensed by the state, but they first must have the approval of the city or county where they plan to do business. Cities and counties can opt out of allowing commercial cannabis sales and most have — at least for now.

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Los Angeles approved rules Dec. 6 allowing retailers to sell recreational marijuana next month, joining other major cities that have done so, including San Francisco, San Diego, Oakland and San Jose. But recreational pot sales won't be allowed in dozens more cities, including Riverside, Fresno, Bakersfield, Pasadena and Anaheim. In some cases, cities have decided to revisit the issue later in 2018 after they see how the new system works.

"It's going to be months, maybe even a year before a majority of the state has access that is less than a half-hour drive away," said Nate Bradley, a representative of the California Cannabis Industry Assn. He estimated that only about a third of the state will initially allow the sale of pot for recreational use.

The delay is disappointing to supporters of Proposition 64, an initiative approved by 57% of California voters last year that requires the state to begin issuing licenses to sell recreational pot at the start of the new year. The Legislature also approved state-licensed medical marijuana sales fstarting Jan. 1 — for two decades it was legal under state law but regulated by local governments.

"The majority of governments in less urban areas have chosen to ban the cannabis business entirely, leaving a cannabis desert in large swaths of the eastern state, Inland Empire and Central Valley," said Ellen Komp, deputy director of the pro-marijuana group California NORML. "It's a shame most of California won't be able to capitalize on the … tourist trade as other states have."

She predicted the transition to licensing sellers and growers "will be a lengthy process extending over a couple of years."

The November 2016 initiative immediately allowed Californians who are 21 and older to possess and transport up to an ounce of marijuana for use for recreational purposes, and to grow up to six plants for personal use. Seven other states and the District of Columbia have also decided to fully legalize marijuana.

The drug remains illegal under federal law, but the U.S. Department of Justice has issued policy guidelines to its prosecutors that have allowed regulated sales to take place. U.S. Atty. Gen. Jeff Sessions has made comments about potentially enforcing federal law, but has not yet taken action.

Komp and others are hopeful that cities banning cannabis sales will eventually open their doors to the trade when officials see the benefits received by California's big cities, including a flood of tax revenue and replacement of black market sales with regulated commerce.

The more than 1,300 dispensaries that now legally sell marijuana for medical use will be able to quickly get state licenses to continue medicinal sales starting Jan. 1, said Lori Ajax, director of the state Bureau of Cannabis Control.

Annual licenses will require a background check, training and a $1,000 application fee. The state will also monitor all marijuana products from farm to counter through a track-and-trace system.

To prevent those costs from putting legal marijuana sales out of reach to new retailers, the new state agency has decided to initially issue temporary permits that are good for four months and do not require application fees or background checks. Ajax's office began accepting applications for temporary licenses on Dec. 8, and is issuing licenses this month that will be effective on Jan. 1.

But businesses can only get a license — temporary or otherwise — if they have a permit or approval to operate from the city or county where they are located.

The potential flood of applicants and the task of adapting to the new regulations and approval process might result in some bureaucratic delays, Ajax said.

"The first few weeks, the first month, I do think people need to be patient," she said. "I think we've positioned ourselves in a good place to issue temporaries on day one so people can continue doing business that have been in compliance with their locals."

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Aaron Herzberg, an attorney for cannabis firms, is skeptical.

"They are clearly not going to be ready and it will be a mess," Herzberg said. "It will be sorted out, but the real battleground is on the local level."

California is the largest state to legalize the recreational use of pot, and Ajax has had just one year to put in place a comprehensive set of regulations and licensing system for marijuana growers, sellers and distributors. Ajax's agency is on a hiring spree, but has so far not filled most of its 90 budgeted positions.

Ajax said she hopes to have sufficient staff by the time potential licensees begin the approval process next month.

With licensing just weeks away, the majority of the state's 482 cities have not authorized recreational pot sales, said Alexa Halloran, an attorney specializing in cannabis law for the firm Harris Bricken.

Halloran said she has surveyed most cities in the state for a client and has identified more than 300 that have not approved recreational pot shops.

Los Angeles city officials say the ordinance adopted Dec. 6 should allow dozens of pot shops to get state licenses starting in January.

"We received instructions from our bosses, who are the voters of this state, that they wanted us to come up with a way to regulate, tax and police this issue, so we are doing everything we can to try to make this deadline," City Council President Herb Wesson said.

Wesson said 150 medical marijuana dispensaries that have been operating in the city will likely be the first able to apply for state licenses for medical and recreational sales in January.

Halloran said 86 of the 88 cities in Los Angeles County do not allow sales for recreational use. Los Angeles and West Hollywood have approved the sales, while some others have taken initial action but not finalized decisions.

Stores selling recreational pot are not allowed in a number of L.A. County cities, including Alhambra, Burbank, Beverly Hills, Glendale, Inglewood, Pasadena and West Covina. Other cities, including Long Beach, decided after Proposition 64 to approve moratoriums on recreational marijuana sales, but plan to take up the issue again in 2018.

The sale of marijuana for recreational use is also banned in unincorporated areas of L.A. County, which makes up more than 65% of the county's land and is home to 1 million people.

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"It's surprising," Halloran said of the initial resistance from cities. "I think a lot of the cities are waiting to see what happens. No one wants to be the spearhead of it."

The L.A. County Board of Supervisors has asked the county's cannabis management officer to develop proposals for possibly allowing marijuana sales. A report with draft proposals is expected to go to the board around January. Final approval of an ordinance could happen this spring.

Supervisor Mark Ridley-Thomas, chairman of the board, said he is not yet convinced that the panel should allow marijuana sales.

"There are huge unanswered questions and prudence is wanted," Ridley-Thomas said. He said potential negative impacts on the brains of young people from strong strains of cannabis is one significant concern.

"Our obligation is to deal with the public health impacts and the regional planning impacts," Ridley-Thomas said. "If we don't do this properly, you will end up with an over-concentration of pot shops on top of an over-concentration of liquor stores throughout L.A. County. There is no good to be derived from that."

City officials who have barred marijuana sales say the decision reflects the values of their communities and concerns about legalized drugs increasing crime.

"We respect the will of California voters, but believe the policy is in the best interest of our neighborhoods," Anaheim city spokesman Mike Lyster said of its ban. "Anaheim residents seeking recreational marijuana will have plenty of options in neighboring cities and throughout Southern California."

Those who opposed Proposition 64 are encouraged that most of California's cities are balking at allowing recreational pot sales.

"No one wants to live near a pot shop, and no one wants to see pot candies sold near their house," said Kevin Sabet, head of the group Smart Approaches to Marijuana, which campaigned against the state initiative.

"More than 60% of Colorado towns have banned pot shops, and that's because people don't want to smell and see pot in their own community," Sabet added. "We predicted this last November. It's totally unsurprising."

Wesson said Los Angeles hopes to become a model for other parts of the state, with rules barring pot shops near schools and parks but giving priority processing and other assistance to cannabis business applicants who are poor or were previously convicted of crimes involving marijuana.

The pressure for action may mount on other cities in the county as their residents flock to Los Angeles to buy cannabis and pay taxes there, he said.

"We know that people [in other cities] kind of watch what we do," Wesson said. "I'm optimistic that we can maybe make it easier for other cities by putting together a common-sense set of rules and regulations."

Twitter: @mcgreevy99

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