September 3, 2019
Los Angeles is closing down and shutting off the utilities to scores of unlicensed cannabis dispensaries in a multi-agency crackdown on the city's thriving illegal marijuana market. The targeted enforcement comes as the city — and California at large — continues to combat the prolific underground industry, which has persisted in the nearly two years since statewide legalization.
"Fundamentally it is important to gain control of this," said Ruben Honig, the executive director of the United Cannabis Business Association, a legal cannabis trade group. "It is not just a business issue. It is also a public health and public safety issue."
The city is also employing a new ordinance that authorizes the Department of Water and Power to disconnect services at unlicensed establishments. Local lawmakers, who approved the law unanimously, said the ordinance was required since illegal dispensaries "pose a current and immediate threat to the public welfare." The city council cited concerns over associated crime and the proliferation of untested cannabis products.
"You're looking at stores that are particularly unsavory — that people don't necessarily want in their communities and neighborhoods," Honig said.
Officials and industry groups also stress that illegal dispensaries are a significant threat to the success of Los Angeles' nearly 200 licensed dispensaries. Since legalization in 2016, California has seized tens of millions of dollars worth of illegal products. In a single raid in May, Los Angeles police confiscated over $1.6 million worth of cannabis goods and 288 marijuana plants.
The black market, authorities warn, also jeopardizes the city's Social Equity Program, which promotes equitable ownership and employment in the cannabis industry and was designed to mend some of the negative impacts that had resulted from the state's prohibition.
The program aims to "decrease disparities in life outcomes for marginalized communities, and to address the disproportionate impacts of the War on Drugs in those communities," the city said.
Honig added, however, that additional regulatory reforms are necessary to end illegal operations, which he said are currently "winning" in the state's fight against the black market. Lowering taxes, for instance, would help allow legal dispensaries to compete with the lower prices offered at unlicensed shops, Honig said.
Legal cannabis dispensaries also cheered the announcement in August that Weedmaps — the Yelp of dispensaries — would no longer list unlicensed establishments on its platform. The site, however, has been criticized for not following through on similar gestures in the past. Last month's announcement also comes over a year since the site was given a cease-and-desist letter from the California Bureau of Cannabis Control.
"When are they going to delist?" Honig asked. "We want to see a date, and we want them to do it now."