LA Votes on Shrinking Medical Marijuana Outlets, Boosting Taxes

May 19, 2013

Alison Vekshin, Bloomberg News

Los Angeles, which has so many medical-marijuana shops that officials have lost count, is asking voters to set limits and raise taxes on cannabis.

The measures on the ballot today include a city plan to limit the number of clinics to about 135, and another offered by the marijuana industry that would allow unlimited dispensaries. A third has been abandoned by its industry backers.

“Each of these three ballot measures start with the premise that there will be dispensaries in the city,” Carmen Trutanich, Los Angeles’s city attorney, said in an interview.

The nation’s second-largest city is among California municipalities that are struggling to restrict the number of pot shops. Starting in 2007, more than 850 medical-marijuana businesses opened, closed and reopened shops and commercial-growing operations in Los Angeles without zoning approval, according to the city plan.

“It has been very difficult for the city to get an accurate number on the number of dispensaries at any given time due to the high rate of turnover,” Frank Mateljan, a spokesman for the city attorney’s office, said by e-mail. “At best guess, we believe there are hundreds operating in the city at any given time.”

First Legalized

In California, the first state to legalize medical marijuana use in 1996, some cities have banned marijuana storefronts, labeling them a public nuisance and a magnet for crime. Los Angeles last year adopted an ordinance banning the businesses, with limited exceptions, only to repeal it after objections from the industry.

Proposition D, the city’s plan, caps the number of dispensaries to the 135 that opened before a 2007 moratorium imposed by the city. The measure also would increase the city tax on the businesses to $60 from $50 for each $1,000 of gross sales receipts.

The city got $2.5 million in business taxes from medical-marijuana collectives in 2012, according to Miguel Santana, city administrative officer.

Initiative Ordinance F would allow unlimited dispensaries, would increase their taxes to $60 from $50 on each $1,000 of gross receipts, bar them from locating within 1,000 feet of a school and require them to file an annual audit of their operations with the city controller.

‘Fumbling Issue’

“Los Angeles has unsuccessfully spent years fumbling the issue of medical-marijuana collective regulation,” supporters said in the ballot. “It is time the people take control of the situation and pass strict but reasonable regulation.”

Initiative Ordinance E, which would ban newer dispensaries that opened since the 2007 moratorium, has been abandoned by the industry and union groups who offered it. Supporters have shifted their support to the city’s proposal, said Kris Hermes, a spokesman for Americans for Safe Access, an Oakland, California-based medical-marijuana advocacy group that was one the plan’s initial backers.

The city’s plan “was so similar to our measure it seemed counterproductive to be competing with the city’s initiative,” he said. “The procedures are such that you can’t remove the measure from the ballot once it’s qualified.”

Voters also will chose between Wendy Greuel, the city’s controller, and City Councilman Eric Garcetti to succeed Antonio Villaraigosa as mayor.

Villaraigosa hasn’t taken a position on the marijuana measures, said Amanda Parsons, his spokeswoman. He supported last year’s ordinance banning clinics.

Preserve Access

“This ordinance is our best option to preserve access to medical marijuana for patients while protecting public safety and quality of life for all Angelenos,” the mayor said in a statement last year.

It’s not unusual for a ballot to have two measures on the same topic, usually the main initiative and a counter proposal, said John Matsusaka, executive director of the Initiative & Referendum Institute at the University of Southern California, in Los Angeles.

“But having three is rare,” he said in an e-mailed response to questions. “These situations create challenges for voters because of uncertainty about what happens if more than one measure receives 51 percent in favor.”

A marijuana measure would have to get more than 50 percent of the vote to pass, said Kimberly Briggs, a spokeswoman for the Los Angeles city clerk’s election division. If all three get more than 50 percent, the one that receives the most votes prevails, she said.

If none passes, the city will have to come up with a policy, whether it’s going to be a ban or restrictions on the numbers of pot shops, said Trutanich, the city attorney, who is running for re-election.

Court Ruling

California cities can block medical-marijuana dispensaries from setting up shop within their borders, the San Francisco-based California Supreme Court said in a May 6 decision.

Los Angeles isn’t inclined to ban marijuana shops in light of the ruling, Trutanich said.

“The majority of the council would like to have people who are medical-marijuana patients be able to obtain the medicine that the need in order to alleviate whatever pain or ailment that they have,” Trutanich said. “The question becomes: How best do you accomplish that?”

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