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RIDING HIGH

The number of medical marijuana outlets spikes,

Los Angeles Business Journal Staff

Marijuana shop in West Hollywood.
Marijuana shop in West Hollywood.
With little fanfare until this month, Los Angeles County has quietly become the country’s capital of medical marijuana.

In the last two years the number of marijuana dispensaries in the county has ballooned from a relative handful to more than 200, according to most estimates.

And in the city of Los Angeles, police said, 45 such shops opened in December alone as entrepreneurs sought to beat a proposed moratorium.

Many of them have opened in strip shopping centers, typically using such names as “compassionate caregivers” or “patient collectives” – names that seldom mention marijuana.

Even the Rev. Scott Imler, who co-authored the ballot initiative that legalized medical marijuana, thinks the industry that he inadvertently helped create has gotten out of control.

“We created this beast that frankly the state and local governments have been too slow to regulate,” Imler said. “We’re a liberal state and everyone wants to bend over backwards to be compassionate and understanding and groovy. And they get taken advantage of.”

The high-profile raid of 11 marijuana dispensaries by U.S. Drug Enforcement Administration agents on Jan. 17 highlighted the sudden industry, as well as its shaky legal foundations: The shops are legal under Proposition 215, passed by state voters in 1996, but still illegal under federal law.

“Los Angeles has had a significant growth in the number dispensaries recently, but remember that this is the second largest (metropolitan area) in the U.S.,” said William Dolphin, communications director for the Oakland-based pro-medical marijuana group Americans for Safe Access.

So far, there isn’t a good handle on the value of the economic activity that medical marijuana generates in the county. While dispensaries pay employee taxes and some collect retail sales taxes, public agency record-keeping is sketchy given the quasi-legal status of the enterprise.

A report presented to an Oakland oversight committee last fall estimates Californians consume between $870 million and $2 billion worth of medically related marijuana each year – and anywhere from a third to a half of that is likely consumed in Los Angeles County alone, given the county’s size.

The rapid growth of the industry has taken city officials, law enforcement agencies and others by surprise. Many have started to ban or at least regulate marijuana clinics more tightly.

However, the local actions have not been enough to halt the raids by the DEA officials, who categorize the dispensaries as illegal drug selling operations – despite California law.

“Granted they’re acting under the guise of legal state law, but under current federal law they’re still drug organizations,” said Sarah Pullen, spokeswoman for the Los Angeles field office of the DEA. The agency’s Jan. 17 sweep was the first time the Los Angeles office had targeted multiple clinics at the same time.


  February 8 - 14, 2010
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