Pubdate: Tue, 11 May 2010
Source: Wall Street Journal (US)
Copyright: 2010 Dow Jones & Company, Inc.
Author: Tamara Audi
Bookmark: (Cannabis - California)


Explosion of Marijuana Dispensaries Leads to Fight Over How to Regulate Them

LOS ANGELES-City officials here are hoping that a new get-tough 
policy will finally allow them to gain control of the hundreds of 
medical-marijuana dispensaries that have sprung up over the past few years.

But many owners of the 600 or so pot outlets currently operating 
openly here don't want to go quietly. They have hired lawyers and 
plan to fight the city in court.

What was supposed to be a comprehensive resolution to Los Angeles's 
long-running pot controversy is shaping up instead to be a long, strange trip.

"The city is going to be bogged down by years of litigation," said 
Dan Halbert, president of Safe Access, a coalition of 130 
dispensaries in Los Angeles that the city recently ordered closed. 
"Nobody wants that." Mr. Halbert, who operates a dispensary, is a 
plaintiff in a lawsuit that a group of dispensaries filed against the 
city last month.

A 1996 California law allows people who are sick or in pain to use 
marijuana, which they can obtain through legal dispensaries.

San Francisco and other cities passed laws capping the number of 
dispensaries within their borders. But Los Angeles never did, and the 
shops mushroomed. The city finally issued a moratorium on new outlets 
in 2007, but failed to enforce it.

Residents in some parts of the city complained that the medical 
marijuana shops were creating a public nuisance, and attracting pot 
smokers who weren't really sick.

Meanwhile, dispensaries opened and closed so quickly that city 
officials struggled to get an accurate count. At first, they said 
there were more than 1,000; that number later was scaled back to about 600.

Now, armed with a new ordinance that restricts the number of 
dispensaries to 186 in this city of 4 million people, the city is 
launching a new offensive. Last week, the city attorney sent letters 
ordering 439 dispensaries to shut down by June 7, when the ordinance 
takes effect.

Dispensaries are defiant. "We're preparing for a long fight," said 
David Welch, the lawyer representing Mr. Halbert's group. He contends 
that the ordinance unfairly discriminates against those dispensaries 
that opened after the moratorium, and plans to request a court order 
allowing them to remain open while the issue is argued before a judge.

Prosecutors said they plan to fight, too. The new law allows city 
attorneys to prosecute offenders with up to six months in jail and 
$2,500 a day in fines.

But a drawn out legal battle could put the city in an awkward 
position. Los Angeles faces a half-billion dollar budget deficit in 
its next fiscal year, and has cut funding to the city attorney's 
office and the police department. A costly court fight could drain 
resources, but officials don't want to come off as accommodating a 
situation that residents complain has become unmanageable.

"We're hoping for voluntary compliance. We're hoping not to prosecute 
439 dispensaries," said Asha Greenberg, an assistant city prosecutor 
overseeing the effort to close the shops. But, she added "we really 
don't know how many people are going to cooperate."

Earl Stein, co-owner of a dispensary fighting closure, said the city 
shouldn't hamper his nascent industry in a recession. According to 
state tax records, marijuana sales generate between $58 million and 
$105 million in annual sales-tax revenue.

Past efforts to reduce the number of dispensaries, including issuing 
the moratorium on new stores, only managed to shutter 34. Meanwhile, 
dozens more sprouted up.

About 21 shops operate in a single Los Angeles neighborhood, a 
2.5-square-mile enclave called Eagle Rock. Michael Larsen, 
public-safety director of the neighborhood council, said the 
situation was "out of control."

Some dispensaries do plan to vanish voluntarily. Private Organic 
Therapy, in a tidy strip mall between a furniture store and an 
upscale liquor shop, will close, said its manager, Dave Warden. Its 
owners don't want to fight the city, he said.

But, he said, another dispensary that opened before the 
moratorium-and therefore can operate even under the new rules-plans 
to move into the same location. Mr. Warden said he would manage the new store.

Like most dispensaries, customers-officially, patients-are buzzed in 
through a locked door once they present a doctor's note. Pot is kept 
behind glass counters in canning jars tagged with names like 
Skywalker and Nameless. Because dispensaries are supposed to be 
nonprofit collectives, operators post "suggested donations" ranging 
from $25 to $90 for an eighth of an ounce of marijuana, depending on 
the strain and the store.

On a recent weekday morning, a plumber, an actress and a tattoo 
artist all came in. Mr. Warden went through the different strains and 
their varying effects.

"He's like the wine sommelier of pot," said Julie Wagner, the actress.

A few miles away, Amy Weiss and her mother, Kathy, said they planned 
to fight the city's order to close their shop, Buds on Melrose. They 
said they spent $88,000 refurbishing the store with a new bathroom, 
soft lighting, red walls and wood floors.

Ms. Weiss and her mother, a breast-cancer survivor, opened Buds after 
the moratorium to cater to female cancer patients.

"There was no place for me to go," said Kathy Weiss, the cancer 
survivor. "I'd go to one place and there'd be a guy with tattoos on 
his head calling me dude."
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MAP posted-by: Richard Lake