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Los Angeles voters approve limiting medical marijuana shops

A man stands in front of a medical marijuana dispensary in Los Angeles, California, July 24, 2012. REUTERS/Jonathan Alcorn
A man stands in front of a medical marijuana dispensary in Los Angeles, California, July 24, 2012. REUTERS/Jonathan Alcorn

By Alex Dobuzinskis

LOS ANGELES (Reuters) - Los Angeles, which has more storefront medical marijuana shops than any other U.S. city, will close hundreds of the dispensaries and hike taxes on those that will be allowed to remain under a ballot measure approved by a wide margin of voters.

Nearly 63 percent of voters supported Proposition D, which will cap the number of medical pot dispensaries at 135, compared with 37 percent opposed, according to preliminary results released on Wednesday, the day after the vote.

Two rival measures that also would have placed new restrictions on the city's medical marijuana industry were defeated by wide margins.

At least 850 storefront medical cannabis shops are estimated to be operating in Los Angeles, the country's second-largest city, and some residents have complained that the dispensaries are a blight on their neighborhoods.

"We've had a great amount of difficulty over the past few years on how to come up with a consensus for handling medical marijuana. This is the perfect solution," said City Councilman Paul Koretz, who worked to get Proposition D on the ballot.

The dispensaries that will be allowed to remain were in operation before city leaders approved a moratorium in September 2007 in a failed effort to prevent the arrival of new store fronts selling marijuana as medicine.

In the years following passage of that limit, hundreds of dispensaries opened amid lax enforcement and a successful challenge by pot activists in state court.

David Welch, an attorney for Angelenos for Safe Access, a group that had spearheaded one of the failed measures, said he would file a lawsuit challenging Proposition D on behalf of dispensaries that would not qualify under the new rules.

California was the first of 18 states to legalize marijuana use for medical purposes. But pot remains classified as an illegal narcotic under U.S. law, and a number of dispensaries in Los Angeles and elsewhere have been raided or forced to shut down by federal authorities.

Despite the prospect of greater city controls, campaign officials said many medical marijuana dispensaries joined the push for local regulation in an effort to gain legitimacy and stave off a potential federal crackdown.

COMMUNITY OUTCRY

Under the measure, which is due to go into effect in about 30 days, taxes on medicinal pot will be increased to $60 per $1,000 in gross sales, from the current rate of $50 per $1,000 in gross sales.

The city will send letters to all known dispensaries advising them to comply with the measure, which in some cases involves paying back taxes, said Jane Usher, special assistant city attorney for Los Angeles.

The city will seek court orders to force the closure of dispensaries that do not qualify to remain open and will not voluntarily shut down, she said.

The City Council put Proposition D on the ballot after a union and allied dispensaries gained enough signatures to place a similar measure before voters that would have capped the number of dispensaries at 135 but would not have hiked the tax.

The union, the United Food and Commercial Workers Local 770, which supports Proposition D, has sought to expand its reach into the legal marijuana industry by organizing dispensary workers. Many of the shops permitted to stay in business under the measure already have union ties, according to the UFCW.

Rigo Valdez, director of organizing for the UFCW, said the push to regulate medical marijuana dispensaries in the city reflects "a community outcry" over their proliferation.

"I think that if the city attorney and the city of L.A. says, 'We've got this,' that the federal government stays out" of enforcement in Los Angeles, he said.

In a sign of the loose rules that have governed medical marijuana outlets in Los Angeles, local officials said they were unsure of precisely how many store fronts exist. Officials estimate that between 850 to 1,700 dispensaries exist in the city, Koretz said.

The passage of the measure came just over two weeks after the California Supreme Court ruled that local governments in the state have the power to ban medical pot dispensaries.

"The good news is that we have quite a body of case law supporting the city's new measure," Usher said.

(Editing by Cynthia Johnston and Leslie Adler)

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