On Sept. 25, 2017, a Los Angeles City Council committee approved revised draft regulations for the city’s cannabis industry. While the original draft regulations were released on June 8, the revised version wasn’t released until Sept. 22, giving industry members little time to prepare for the meeting on Sept. 25.
If the full city council passes the revised regulations, as approved by the Rules, Elections, Intergovernmental Relations Committee, existing medical cannabis businesses would have to close by Jan. 1, 2018, and wait to receive licenses from the city before reopening.
“I realize that that’s a flaw and we’re going to try to deal with it,” said Herb Wesson, council president and committee chair, during the committee meeting, as reported by the Los Angeles Times. “But I’m not going to let one flaw slow down the process.”
While Wesson has said he will figure out a way to fix the flaw, many businesses may be left in limbo.
“It’s inconceivable how I can shut down my business while waiting for the city to approve my application and also survive,” said Cameron Clarke, owner of a company that makes cannabis products and edibles.
“It’s going to make it harder for the people who want to operate legally to continue on operating,” said Tomer Graziani, a member of the Southern California Coalition, as reported by KABC. Graziani suggested that the city enact a temporary licensing system or grace period for existing medical cannabis businesses so the city doesn’t lose out on cannabis businesses willing to pay taxes.
While Los Angeles permits medical cannabis dispensaries to operate in the city, it never established a system for licensing the rest of the supply chain. If existing medical cannabis dispensaries get priority licensing as ordered in the revised regulations, they may have to look outside of the city for licensed suppliers until the city opens the application window for general public processing.
Beyond the potential closure of existing medical cannabis businesses, the revised regulations also address operating rules, priority licensing, an on-site consumption ban and a social equity program, among other details.
The revised regulations approved by the Los Angeles City Council committee now have to be voted on by the city council before the city attorney can sign the regulations into law.