A Los Angeles City Council committee on Monday signed off on draft rules for licensing marijuana businesses, but many industry groups are still far from satisfied with the latest regulation language, which they warned could lead to a shutdown of the local pot industry.
Council President Herb Wesson admitted during a Rules, Elections and Intergovernmental Relations committee hearing that there was still “a flaw” in the proposed regulations, and that there was still some work to do.
But he said he wanted the city attorney to begin working on the legal language for the rules, since the majority of it is ready. Meanwhile, he plans to figure out the final pieces of the legislation in the coming weeks, he said.
The Southern California Coalition was one of the groups that sounded the alarm that the revised rules, released last week, leave out a way to quickly license currently operating businesses on the supply-side. Unlike pot dispensaries, such businesses have never been given a path to operate legally, the group says.
In order for such businesses to obtain state licenses, which are expected to become available in January, they must first have licenses from the city.
Wesson responded to the concerns Monday, saying he plans to address them, but has not reached “a point yet, where I could make recommendations to the other members of this committee on how we should proceed on that item.”
Wesson, who has been hosting working group discussions on marijuana regulation for the past year, added he wants to find a solution for existing businesses like cultivators, because “Lord knows, we want to protect jobs.”
Wesson was speaking to a council chamber filled with cannabis business owners and workers, some of whom got up to complain that the revision lacks clarity and leaves businesses hanging.
Rejena Taylor, an employee of Los Angeles grower THC Design, told the committee that the draft rules as written could have wide consequences for workers.
“Forcing suppliers and dispensaries in Los Angeles to close their doors until a local authority process is available, at a time still to be determined, would greatly affect a massive amount of jobs in Los Angeles, including mine, and the jobs of people I care about,” she said.
Adam Spiker, executive director of the Southern California Coalition, said that if the city does make it impossible for existing businesses to obtain state licenses, bad operators could take their place.
The law-abiding businesses would “comply because they care about being regulated,” Spiker said. “It’s the ones that we all agree we need to close down that are going to stay open and still supply product to meet the demand that’s out there.”
The exchange between city leaders and members of the cannabis industry Monday is the latest in an ongoing effort by industry groups like Southern California Coalition, the LA Cannabis Task Force and others to advocate for a “provisional” or preliminary license for existing “non-retail” businesses such as cultivators, distributors, manufacturers and others that serve the pot dispensaries.
The official licensing program is anticipated to be a time-consuming process, with potentially extensive applications to put together, a series of inspections to pass, and an approval system that takes community input into account.
Some ideas have been bandied about to quicken the process for those that currently operate in the city. One was to set up a business registry in which companies come out of the shadows to let the city know they plan to apply for licenses and therefore follow the rules. However, the idea has not gained traction.
Some on Monday suggested that the city give licenses only to those that already supply the existing, legal pot dispensaries in the city, that now number around 100.
Wesson said Monday that was among the ideas he is exploring, but he has not yet reached a decision.
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