A ban meant to prevent new dispensaries from opening included a loophole that entrepreneurs have exploited. Where four years ago there were only a handful, now there may be 600 dispensaries.
Four years ago, when the Los Angeles City Council started to wrestle with how to control medical marijuana, there were just four known storefront dispensaries, one each in Hancock Park, Van Nuys, Rancho Park and Cheviot Hills.
Now, police say there are as many as 600. There may be more. No one really knows.
That exponential rise came despite a moratorium passed in 2007 that was supposed to prohibit new dispensaries from opening. An exception was made for 186 that were already in business and registered with the city.
"The city of L.A. has failed us on this issue," said Michael Larsen, public safety director with the Eagle Rock Neighborhood Council. "There's a huge loophole. L.A. city's not watching. L.A. city's not enforcing."
No other city in California has seen such uncontrolled growth in dispensaries. As signs featuring the easily recognized saw-toothed cannabis leaf multiplied on commercial strips, neighborhood activists like Larsen began to ask their council members why the city was not shutting down dispensaries that opened after the moratorium.
Larsen was shocked at the answer. "Nothing controls these," he said.
The moratorium includes a standard provision that allows dispensaries to appeal to the City Council for a hardship exemption to be allowed to operate. Some time last year, medical marijuana entrepreneurs discovered that the city attorney's office was not prosecuting dispensaries that had filed hardship applications, saying the City Council needed to rule on them first. The council has not acted on any of the applications.
So far, 508 dispensaries have applied for exemptions.
It was months before anyone at City Hall realized what was happening.
Dispensaries have spread across the city. In some places, they are clustered two or three to a block, sometimes near schools, libraries and parks. When the council passed the moratorium, it did not include LAPD Chief William J. Bratton's recommendation to keep dispensaries at least 1,000 feet from places that children frequent.
Alarmed, the City Council's planning committee Tuesday took a step to close the loophole by sending a motion to the council that would strike the hardship exemption from the moratorium.
The committee's chairman, Ed Reyes, said he had not brought up any hardship applications for review because he expected them to become moot once the city passes a medical marijuana ordinance.
The City Council approved the moratorium to give itself time to write a comprehensive ordinance regulating dispensaries. But the committee has been laboring over a draft for more than a year.
Reyes said he became aware that the pending exemption applications were creating a loophole about three months ago.
"I don't think anyone could have predicted how that clause was going to be used," he said. "We've got abusive folks who are just gaming the system."
Councilman Jose Huizar proposed the motion April 28 to end what he called a "perverse exploitation," responding to complaints from constituents in Eagle Rock, which may have as many as a dozen dispensaries.
"I was pretty infuriated when I found how many have gone up and without consideration for the local community," he said. "I do think there are a few culprits right now who are just screwing it up for the legitimate dispensaries."
Huizar's proposal would allow the city attorney to pursue legal action to close any dispensaries that open after it becomes law, but it would leave untouched the hundreds that have already slipped through.
In the month after Huizar introduced his motion, 183 dispensaries filed for exemptions.
Those dispensaries have carte blanche to operate until the council acts on their applications or an ordinance is in place, as would any other dispensaries that file before Huizar's motion takes effect.
Roughly half a dozen applications are filed with the city clerk every day.
The council will take up the motion Tuesday, but it could take two more weeks to become law.
Reyes said Tuesday he intends to whittle away at the hardship exemption applications, holding hearings in the council on a dozen at a time. If the council denies an application, the city attorney could then begin legal proceedings to force the dispensary to close.
"I'm willing to sit there as many hours as I need to because it's ridiculous that it's happening," he said.
When residents complain to the city about a new dispensary, city inspectors check it out. The Department of Building and Safety has received about 200 complaints. It has issued about 80 orders to comply with the moratorium.
Those cases remain active.
"Technically, they are not open legally," said Frank Bush, assistant chief for the code enforcement bureau, but he noted, "Before we can take any further enforcement action, the City Council has to review them and take any action."
Initially, most hardship applications were filed by dispensaries that had tried to register by the deadline but failed to meet the requirements, which included a city business tax registration certificate and liability insurance coverage.
About a year after the moratorium took effect, a new type of applicant started to appear: new storefront dispensaries. They argued for exemptions on the grounds of providing a needed community service.
In a September 2008 application, a representative of a dispensary on Laurel Canyon Boulevard in the San Fernando Valley wrote in a two-page, handwritten plea: "I believe we have done everything possible to see every patient walk out with nothing less than a smile. We show love to all, respect towards everyone and compassion with understanding to our patients and our community." It ended with the salutation, "With Love and Respect."
Most dispensaries adopted a more dispassionate approach, merely noting that they "had just become aware of the need to register" and asking that the council approve the application.
It was not long before collectives that wanted to open storefront dispensaries realized that, if they filled out a three-page form, city officials would then be powerless to close them down. Word spread.
In December, Stewart Richlin, a lawyer who said he represents more than 100 collectives, came up with a new rationale for a hardship exemption that he filed for a downtown dispensary.
He wrote that the collective had been forced to operate without city approval because the moratorium "required that managing members of the collective literally confess a federal crime in order to register." He argued that the federal government's raids had created "a pattern of terror and fear." Then he noted that a recent court decision and the state's attorney general's guidelines on how to distribute medical marijuana legally promised a "new era."
"The people who filed originally were braver," he said, "but the people who are filing now are more careful, law-abiding and conservative patients who waited to get more of a signal."
Richlin's approach caught on. Many dispensaries simply cut and pasted Richlin's explanation onto their forms.
The lawyer, who said he was flattered by the unauthorized appropriation, believes the city has no public interest or real need to control the number of dispensaries.
"There is a thing called supply and demand, and we aren't in need of paternalistic government," he said.
Richlin also noted that removing the exemption from the moratorium would give it teeth, but just for a few months. The one-year moratorium, extended twice for six-month periods, expires in September.
"They're trying to close the barn door after 500, 600 centers have relied on the old rules," he said.
john.hoeffel@latimes.com
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