Regulating Reefer

July 19, 2007

Daniel Harju, LA City Beat

When a working group of city officials and medical marijuana advocates first met in February to decide how Los Angeles should regulate its medical marijuana market, they were surprised to learn that nobody could say how many dispensaries are in the city. No one was keeping track.

Within the next few weeks, the L.A. City Council is expected to unanimously pass a moratorium on new medical marijuana dispensaries, the first step in an effort to regulate the city’s rapidly expanding medical marijuana market. Since November 2005, the number of dispensaries has grown from four to somewhere between 100 and 200 today. Medical marijuana advocates and dispensary operators support the moratorium, because it will allow the city to cap the market until well developed regulations are in place, without disrupting supplies to patients.

Councilman Dennis Zine, who introduced the idea of the moratorium last September, also suggested creating the working group to study and develop regulations for medical marijuana dispensaries. This group consists of officials from the city attorney’s office; members of the building and safety, planning, and police departments; and representatives from the councilmembers’ staff as well as from Americans for Safe Access, a national medical marijuana advocacy group.

The moratorium, which would go into effect immediately, calls for a yearlong ban on new dispensaries, with the option of extending it twice for six months at a time. During this period, the working group would meet once a month to develop the regulations.

“This is going to be the most complicated and arduous regulations process we’ve seen yet,” says Chris Fusco, L.A. County field coordinator for Americans for Safe Access. He anticipates that it will take two years to develop the rules, as the process will involve several different departments. Regulations will spell out zoning laws, operating requirements such as permitted opening hours, security issues such as security guards and cameras, and limits on how much medical marijuana a patient can acquire at each visit.

Existing medical cannabis collectives with the basic documentation that any dispensary would already have obtained will have 60 days from the moratorium’s passage to register with the city so they can stay open during the moratorium, according to Fusco.

More than 10 years ago, California voters passed Proposition 215, also known as the Compassionate Use Act, giving patients and caregivers the right to possess and cultivate cannabis for medical purposes. State Senate Bill 420, passed in 2003, clarified the amounts that are legal to possess, while also giving members of medical marijuana collectives the right to grow and supply to other members in return for compensation.

West Hollywood is among the few cities that have a medical marijuana ordinance, which limits the number of dispensaries to four and allows them only on a few major commercial streets.

“We didn’t really see that much activity until the last couple of years,” said Michael Jenkins, city attorney for West Hollywood. “We’re mostly concerned about making sure that the dispensaries don’t have any adverse impacts in the surrounding neighborhoods.”

That is a concern in Los Angeles, as well. In a November 2006 report to the Board of Police Commissioners, L.A. police Chief William Bratton proposed a zoning restriction to prohibit dispensaries from operating within 1,000 feet of schools and parks. That proposal has come under debate, as Americans for Safe Access considers such a limitation too restrictive and based on an arbitrary number.

“We want [regulations] to make sure that collectives are sufficiently buffered from sensitive uses,” Fusco says, “[and that dispensaries are] compliant with their business licensing and taxes paperwork. Things that any sensible business of this nature would comply with.”

Los Angeles County has implemented a voluntary medical marijuana identification card program – mandated by Prop. 215 but slow to catch on in the state. (Less than half of California’s 58 counties have such a program.) Issued to eligible patients by the county department of public health, the cards are good for a year and cost $166, with a 50 percent discount for Medicare patients.

“When we began this process and were estimating how much we needed to charge [for a card] to cover our costs, we estimated that we would have 3,000 cardholders in Los Angeles County,” says John Schunhoff, chief deputy director of the county Department of Public Health. “But we don’t know if that is a small number or a very large number.”

Patients must make an appointment to apply for a card in person, and, since the program’s inception on June 1, the department has only received about 130 application requests, according to Schunhoff.

“For most people, the cost of the card alone is going to be far more than their doctor’s visit, on top of the cost for medication,” says Fusco, who nevertheless recommends that patients get one. “This card will finally give limited immunity to bona fide and qualified patients in Los Angeles County.”

Since implementing a patient identification card program in 2005, as called for by SB 420, the state has issued about 13,100 cards, according to Lea Brooks, spokesperson for the California Department of Health. The program has been mired in financial hardships and nearly went bankrupt after its first year because of low demand, according to Fusco.

Initially, the card program was only being implemented in progressive areas like Mendocino County, where the demand for cards was low because patients did not need them, he says.

“Where we really needed the cards were in the populous conservative counties down south,” Fusco says, referring to counties like Los Angeles, San Diego, and Riverside.

Americans for Safe Access estimates that about a third of the state’s 300,000 medical marijuana patients live in L.A. County. Another estimate suggests the number of state patients to be between 150,000 and 350,000 and the California market to be up to $2 billion per year, according to a 2006 report by Oakland medical marijuana advocates Dale Gieringer and Richard Lee, which made a case for taxing the cash crop.

The California Board of Equalization determined in April that medical marijuana dispensaries were not exempt from taxation and sent out an open letter requiring dispensaries to obtain a seller’s permit and register with the board to pay sales tax, or face interest on taxes due and penalties.

The supply sources for the L.A. medical marijuana market remain largely unmapped, although some suggest that the nearly two dozen recent raids on suburban growing houses in the area point to an increase in local marijuana cultivation, possibly to supply the increasing medical marijuana market. But the city of L.A. has no plans to get involved with quality control and safety regulations of the drug itself – that responsibility is entirely upon the dispensaries. There are potential health risks associated with smoking or ingesting moldy or pesticide-tainted marijuana.

“Any compliant collective very carefully screens any medicine before they pass it on to patients,” says Fusco, who notes that all sensible dispensaries in the city effectively self-regulate.

The Greater Los Angeles Caregivers Alliance – the state’s largest self-monitoring group, consisting of 60 active local collectives – offers an unofficial license of approval to dispensaries that pass a series of inspections. The alliance meets monthly and has thus far inspected and accredited 11 dispensaries, with 20 more currently being considered.

“We see self-regulation as an absolutely necessary part in this process [because] the government just moves so slowly, and somebody needs to do something about these collectives,” Fusco says.

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