Remember in May 2013, when voters in the city of Los Angeles faced not one or two but three — three! — competing ballot measures to regulate medical marijuana? In March, voters may again have to make an important choice on the city’s marijuana policy.
There are two measures proposed for the ballot. Both attempt to clean up the regulatory mess created by L.A.’s past mismanagement of medical pot shops, and they anticipate the very real possibility that Californians will pass Proposition 64 on Nov. 8 to make recreational marijuana legal in the eyes of the state. But the two measures — one developed by an industry group and the other by City Council members — offer different visions of how Los Angeles should manage the growing marijuana industry and who should profit from it.
The proposals respond to a problem created last year, when Gov. Jerry Brown signed legislation that established the state’s first comprehensive system to regulate medical marijuana. Under this new regime, marijuana businesses must obtain a license from the state, but they can’t get one without a local permit to operate. The problem is that the city of Los Angeles doesn’t issue permits.
If Prop 64 passes, California’s marijuana industry is expected to double in value, up to $6 billion in a few years.
The city’s approach, belatedly adopted in 2013 (when voters approved Proposition D over two alternatives), allowed 135 dispensaries, all of which had been in business for at least six years, to remain open, while banning others. But in a complicated, lawyerly maneuver, the measure did not actually permit those 135 dispensaries to operate — which legal experts at the time said the city could not do because marijuana remains illegal under federal law (as it will even if Proposition 64 passes). Proposition D merely said the city would not prosecute those 135 shops.
As a result, marijuana businesses in Los Angeles that remain open after January 2018, when the state begins requiring licenses, could face criminal prosecution.
In response, the United Cannabis Business Alliance — a coalition that includes about 40 of the city’s 135 quasi-legal dispensaries and the union representing many dispensary workers — has proposed to replace Proposition D with a permitting and regulatory system overseen by a new city agency called the Department of Medical Marijuana Regulation. The agency would issue permits not just for dispensaries, but marijuana growers, manufacturers, testing facilities and distributors — none of which were granted immunity under Proposition D. The measure would give priority for permitting to the 135 dispensaries protected under Proposition D, meaning those businesses would have a monopoly over the industry unless the City Council votes to expand the number of permits. And it would allow permitted medical marijuana businesses to operate as adult-use marijuana businesses if Proposition 64 passes.
A measure drafted by an industry group specifically to ensure that its members are first in line for any marijuana business permits is obviously problematic. In another troubling feature, the proposal would establish the framework for how L.A. would regulate all marijuana businesses, including where they could be located, hours of operation and penalties and fines for violations. Those are decisions that should be made by city policymakers after a transparent and thorough debate, not written by an industry group.
After months of delay, the City Council has finally stepped up with a last-minute ballot measure to counter the industry-drafted one. Councilman Bob Blumenfield wants to repeal Proposition D and essentially start from scratch by returning authority to regulate the marijuana industry to the city. He and Council President Herb Wesson have called for a city-sponsored measure that would leave voters to approve the one thing voters must approve – the tax rates for marijuana businesses.
The timing is tight — the City Council began considering this proposal just last week, and it has to vote by Nov. 9 to put the measure on the ballot. Yet this is a far better approach, at least conceptually. The marijuana marketplace is already being transformed by the new statewide regulations. If Prop 64 passes, California’s marijuana industry is expected to double in value, up to $6 billion in a few years. There would be enormous pressure to open and expand businesses, legally or not. And it would be both a challenge and an opportunity for city leaders, who must balance the demands of an industry that could generate jobs and tax revenue with the concerns of law enforcement and neighborhoods that have to deal with the proliferation of pot businesses.
To see The Times’ recommendations for this year’s ballot measures, visit latimes.com/endorsements.