With licenses to sell Cannabis and related products such as edibles in Los Angeles costing tens of thousands of dollars, a new generation of dispensaries are aggrieved at the number of outlets still operating illegally. They are demanding a level playing field.
A resulting police crackdown on unlicensed marijuana businesses has totalled misdemeanor charges against more than 500 people in LA so far, the city attorney’s office said.
In 120 criminal cases filed since May, City Atty. Mike Feuer has charged 515 people in connection with 105 illegal marijuana businesses, grow sites, extraction labs and delivery companies throughout the city, his office announced Friday. A spokesman would not comment on requests for information on the number of complaints from licensed outlets.
All of the defendants were charged with unlicensed commercial cannabis activity within Los Angeles, which carries a potential sentence of six months in jail and $1,000 in fines. Judges have been hearing the cases since May with arraignments scheduled through the end of October, Feuer’s office said.
Those arrested are complaining the City set a July deadline for companies to conform to the new rules, and then moved too soon in some cases.
Though the number of defendants will make a dent in unlicensed operations in the city, the larger aim of the crackdown is to try to level the playing field for marijuana businesses that are following the rules, Feuer said.
“If they’re going to go through this process, it just cannot be the case that others that flout the rules are allowed to function,” Feuer said. “It’s bad for those who buy from them, it’s bad for the communities in which they’re located and, again, it threatens to undermine the viability of a system that’s predicated on lawful licensing.”
As of Thursday, there were 165 approved cannabis storefronts and delivery businesses operating in Los Angeles, but many more without licenses were already open in Los Angeles.
The license application fee for sellers and others is $1,000 annually, just as an upfront payment – but there are additional license fees of $4,000 to $72,000 charged to retailers based on how much they sell.
Also, an additional fee for testing firms will range from $20,000 to $90,000, while an added charge for distribution licenses will go from $1,200 to $125,000 depending on the amount of product moved. This is likely to put pressure on small one-person delivery services
While those planning small pot farms worry about the rules allowing large corporate growing operations, others see restrictions as burdensome for an industry that has thrived for decades without regulation.
The new regulations allow the Bureau of Cannabis Control to issue temporary, 120-day licenses to sellers and growers who have permission from their city or county. Eventually, annual licenses will be issued to those who pass background checks.
A seller of marijuana for medical use must get an M-license, and a seller of pot for recreational use must get an A-license. Sellers of both can get both licenses and operate in the same facility.
For growers, the California Department of Food and Agriculture charge a one-time fee ranging from $135 to $8,655 to review an annual cultivation license application. Growers are required to get an annual license fee based on annual production, ranging from $1,205 for small plots to $77,905 for big farms.
Manufacturers of cannabis products including edibles are charged a $1,000 application processing fee and a license fee, depending on size of operation, from $2,000 to $75,000.
The crackdown reached all corners of the city, from South L.A. and Boyle Heights to communities in the San Fernando Valley and the Westside, officials said.
“It’s important that every element of the new recreational marijuana regime in our state be implemented in a way the voters anticipated in the first place,” Feuer said.
Some of the unlicensed storefronts were near schools or didn’t follow city of Los Angeles regulations regarding security, among other things, Feuer said. Without proper permitting, there is no way for customers to know that the marijuana they’re buying is safe from toxins or other contaminants it’s exposed to when it’s grown, he added.
Of the 515 defendants Feuer’s office has charged, 21 have so far pleaded guilty or no contest to misdemeanors or infractions, one defendant was placed in a diversionary program, 11 cases were dismissed and 10 defendants are wanted on bench warrants. The remaining 472 cases are pending, city officials said.