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What’s the future of LA’s marijuana dispensaries?

Los Angeles voters passed Measure D, which requires most medical marijuana shops in the city to close. (Photo: Finely rolled marijuana joints from one marijuana dispensary in Los Angeles.)
Los Angeles voters passed Measure D, which requires most medical marijuana shops in the city to close. (Photo: Finely rolled marijuana joints from one marijuana dispensary in Los Angeles.)
Frank Stoltze/KPCC

David Welch has been fighting the city of Los Angeles and its attempts to regulate medical marijuana dispensaries for more than five years. An attorney who represents more than 40 dispensaries in the city, Welch said the passage of Measure D by L.A. voters last week makes that fight a lot tougher now.

“The public and the courts may no longer have a stomach for endless marijuana litigation,” Welch said. “People want it to be done.”

That does not mean his clients are not considering a lawsuit challenging Measure D, which allows only the 135 dispensaries that first registered with the city in 2007. Welch argues that’s an unfair and arbitrary way to regulate businesses.

But he and others who follow the legal battles say the California Supreme Court’s recent ruling allowing cities to ban dispensaries outright make legal challenges to local regulations more difficult. Welch is issuing a new warning to the pot shops he advises that are among the 135.

“I’m advising them that when Measure D goes into effect, they are obligated to close,” he said.  Several of Welch’s clients declined to be interviewed.

Estimates vary widely on the number of pot shops affected.

For now, some appear to be operating as if there was no election. Because of the nature of the business, no one at a dispensary agreed to be quoted. But one man who answered the phone at a downtown L.A. shop seemed unconcerned.

“Everybody is just like, chill back. Ya know, it's like normal," he said.

He said he’s seen the city go after pot shops before.

“It's pretty much like a threat, trying to scare people. But it doesn’t happen,” he said.

City officials said this time is different. It’s the first time voters have enacted a limit, said Special Assistant City Attorney Jane Usher. She is overseeing the enforcement of Measure D.

In addition, she also cited the ruling giving cities the right to prohibit dispensaries.

“We are on strong legal ground right now,” she said.

Measure D officials takes effect 30 days after voters approved it.  The city will give dispensaries another 30 days to comply.

“At the end of that period, you shouldn’t be in business if you are not one of the 135 (dispensaries),” Usher said.  “We will bring civil proceedings, and I’m sure there will bring criminal proceedings. Everything is on the table.”

Usher said she expects most dispensaries to voluntarily comply with the new law.

The 135 that may remain open must meet new regulations. Owners and mangers will undergo new criminal background checks and they must pay all of their back taxes. They must also re-locate if they are within 600 feet of another pot shop, within 1,000 feet of a school or adjacent a residential area.

Usher said that last requirement is a bigger problem than many think.

“The way our city is laid out, even our commercial boulevards in many parts of the city, have residences behind them,” Usher said.

Clearly, some of the 135 dispensary operators who can remain open are nervous about the future. One woman, who works at a West L.A. pot shop and who asked not to be identified, told a caller not to expect to hear back from the owners.

“I know that they usually try to keep a low profile,” she said. "Especially right now, nobody knows what’s going on, so we don’t know exactly what the city is going to do.”

Welch said one consideration is jobs. The medical marijuana industry in L.A. has exploded, with some shops making millions of dollars a year and employing several people.

“The saddest part is that there’s going to be thousands of jobs lost when “D” goes into effect,” Welch said.

He also wondered if pot prices will rise, with fewer dispensaries.

Some marijuana dispensaries could close their storefront operation but go underground.

As Los Angeles enters a new phase in its long and rocky relationship with medical marijuana, federal prosecutors are watching. Federal law prohibits the use of marijuana, and prosecutors have said they have no intention of ending an effort to close pot shops.

Some marijuana activists, meantime, are preparing a new statewide ballot measure that would legalize pot entirely. They hope to place it on the 2016 statewide ballot.