Los Angeles Dispensaries Quiet On The Surface

Most, but not all, pre-ICO pot shops in the city were closed for New Years Day. A news conference set for 1pm tomorrow at police headquarters in downtown L.A. could determine when they re-open.

LOS ANGELES – New years day brought adult use sales of cannabis to the Golden State, but in the city of Los Angeles that special day must wait until the city begins issuing temporary permits on December 3, after which the state will need to issue temporary state permits (good for 120 days) before the shop in question can open for adult use business. Still, some pre-ICO dispensaries were open for business today, but only as medical cannabis cooperatives, the same status they have been operating under since the Los Angeles City Council adopted Proposition D on June 14, 2013.

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Most shops stayed closed, however, not necessarily in observance of the New Year, but in many cases out of concern that opening as a collective could imperil the operation’s application for a license to operate as a for-profit, adult use business. Now they need to decide when to reopen, and whether to reopen as a collective or wait until they are fully, or at least temporarily, permitted by the city under Prop M, the taxation and regulatory reform initiative approved overwhelmingly by voters last year. Opinions vary as to which course to take, to say the least, and the debate has been raging ever since the city announced a little over a week ago that it would not be able to start issuing permits before January 1.

Indeed, the amount of confusion and misinformation being bandied about regarding what Pre-ICO/Prop D shops should do after January 1 became so acute after that announcement that a meeting was called last week by Cat Packer, the head of the city’s Department of Cannabis Regulations, in an effort to provide accurate and up-to-date information to the cannabis business community. In addition to Packer and one of her staffers, the meeting, held Wednesday also was attended by a representative from the city attorney’s office. Lori Ajax, chief of the state’s Bureau of Cannabis Control, joined by telephone for a portion of the meeting, according to Greg Meguerian, CEO of Cahuenga Caregivers Inc. in Van Nuys, aka The Reefinery.

Invited members of the business and worker community included representatives from the United Food and Commercial Workers union (UFCW), the California Minority Alliance, the UCBA trade association, the Southern California Coalition (SCC), and the Greater Los Angeles Collective Alliance (GLACA). In all, about a dozen people were in attendance. The idea behind keeping it small was to better control the message that would be delivered back to members of the various groups.

“Cat Packer called the meeting because she knows there is a lot of misinformation out there,” said Meguerian, a GLACA board member and founding member of SCC. “She also knows that as the heads of these prospective organizations, we could get correct and updated information and communicate it back to our memberships.

“The main message,” he added, “was that, moving forward, the city and the state will be having regular meetings, updating [one another] throughout the process to make sure everything goes smoothly, and also, that under Prop M, Prop D dispensaries still have limited immunity until their application is reviewed and either approved or rejected.”

The latter point speaks directly to a main concern for shopkeepers, but Megeurian was swift to point out that the comments did not come in the form of advice. “Neither Cat nor Lori advised anything,” he said. “They said [we need] to speak with our lawyers, but that they could not give us legal advice about our business decisions. But Cat and the city attorney did state the city law that gives us limited immunity under Prop D, and Lori, after a question about the collective model [model], did say we could operate as a collective as long as we are following the attorney general’s guidelines.

“They can only tell you what the law allows them to tell you,” he added, “but what [the meeting] showed us is that the state and city are communicating and that they both want to get this done. They were very specific that they want to make sure this gets done in a timely and seamless manner so that there is no interruption of safe access. Everybody agreed on that, but nobody is going to tell you whether to stay open or close.”

The guidelines mentioned by Ajax, which were released by then-California Attorney General Edmund G. Brown Jr. on August 25, 2008, clarified for the first time the state’s laws governing medical cannabis, and provided guidelines for patients and law enforcement to ensure that cannabis was not being diverted to illicit markets. They are the same guidelines pre-ICO cooperatives have presumably been operating under since the rules were established.

Meguerian also noted an expressed desire by the city and the state to get shops open and selling cannabis for adult use. “The feeling we got is that they want to process us as quickly as possible,” he said. “The city website says it could take weeks, but I highly doubt it will take that long, especially since [the city has] decided to do temporary permits instead of going straight to [permanent] permitting.” Some details about what the city needs from applicants to speed up the process need to be clarified, but Meguerian thinks “temporary licensing will be a simple, quick review to see if you are one of the real, pre-ICO, Prop D operators, and Lori told us straight up that all she wants from us is landlord authorization, a site diagram that doesn’t have to be LADBS-approved, and local authorization. With only 150 to 190 applicants possible from Los Angeles, I think they’ll be pretty quick.”

Meanwhile, shop operators that closed today still need to decide when to reopen. To help them answer that question, a press conference has been scheduled for 1pm Tuesday at the Los Angeles Police Administration Building in downtown Los Angeles, where Chief Michel Moore will address cannabis roll out and enforcement.

Back at The Reefinery, the doors may have been closed today, but the place was a beehive of activity as staff prepared for the new reality of adult use sales, increased traffic, and all the compliance requirements that come with it. They will not do adult sales until licensed to do so, of course, and are eager to reopen as a collective as soon as possible after tomorrow’s meeting. Meguerian, who founded Cahuenga Caregivers in 2005 and whose roots run deep in the San Fernando Valley, has been fielding calls continuously for two days from shop owners and others desperate to talk through the options before them. Every situation is different, and everyone must make their own decision. The meeting tomorrow should be packed, even if the core issue these retailers face comes down to a pretty basic decision.

“At the end of the day, the safest thing to do is to close until you have your license. Then it leaves no doubt,” explained Meguerien. “But at the same time, if you think they’re going to get you for being a collective, what’s to stop them from getting you anyway?”

Of course, punishing the very pre-ICO/Prop D cooperatives the city and state need right now just for being cooperatives makes little sense if, as reports indicate, Governor Brown is personally engaged in demanding that the regulating agencies get Los Angeles squared away asap. It makes perfect sense. As far as the state is concerned, California will not be fully online as a tax-generating monster until L.A. is online.

Happy New Year!

News Conference

What: Cannabis roll out and enforcement

When: Tuesday, January 2, 2018 at 1pm

Where: Los Angeles Police Administration Building
100 West 1st Street, Los Angeles, California, 90012
Compstat Room

Who: Chief Michel Moore, LAPD First Asst. Chief, Office of Operations

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