Weekly Wrapup: Future of Medical Marijuana in California After LA Ban + Colorado Patient Numbers

By now, most of the medical cannabis community is aware of the chaotic developments in Los Angeles last week, when local officials voted in favor of a ban on dispensaries.

The details are still being worked out. It’s unclear, for instance, if officials will eventually allow up to 182 existing dispensaries to continue operating.

Still, we can speculate about what it will mean to the medical marijuana industry in California. Here are three scenarios that could play out in the months to come:

#1. The ban in Los Angeles serves as the tipping point in California, leading to a collapse of the entire medical marijuana industry in the state. Other cities use L.A. as an example and institute their own bans, and dispensaries cease to exist in California. This may sound alarmist. But it’s no longer a far-fetched idea, given that dozens of California cities and towns have already banned dispensaries and the government has exerted crushing pressure that has forced hundreds of centers and related businesses to close. This scenario becomes more likely if the Los Angeles City Council institutes a complete ban and the feds successfully force Harborside Health Center in Oakland to shut its doors.

#2. The ban damages – but does not destroy – the MMJ industry in California. Dispensaries still exist in the state, but only in a handful of cities and counties. California transitions from the epicenter of medical marijuana to an afterthought as state officials try to rework laws and regulations to set up a sustainable model.

#3. The city allows nearly 200 long-standing dispensaries to remain open, which actually strengthens the medical marijuana industry in Los Angeles and California. Under this scenario, the partial ban weeds out most of the sketchy operations that have given MMJ a bad name in Los Angeles and turned the city against the industry. The remaining dispensaries are well-run, respectable and legitimate entities that are truly following local and state MMJ laws. The feds ease up a bit on the pressure, and California is left with a stronger – though smaller – medical marijuana industry.

So which one is most likely? We’d say #3. There’s a good chance that the council will decide to let dispensaries open before 2007 continue to operate.

At the same time, L.A. really does need to clean up its MMJ industry, which we see as a good thing. There are an estimated 800-900 dispensaries in the city, and some of them are engaging in questionable or clearly illegal practices. These centers have tarnished the industry’s reputation and hurt dispensary owners in the city and state who are trying to do it right. They don’t work to foster ties in their communities, engage with others in the industry, strive to help patients or attempt to further the MMJ movement. They simply want to make profits any way they can, even if it means selling out the back door. These types of operations need to go.

That’s not to say some, or even a lot, of quality dispensaries will get caught up in the chaos – especially the respectable ones that opened after 2007. Reputable owners will be forced to close their shops, and thousands of workers will lose their jobs. It will be painful no matter what happens.

For the industry to move forward in California, however, it just might be necessary for LA to take a few steps back.

Other top stories in MMJ Business Daily last week:

Colorado Patient Numbers Rise Yet Again

A New Strategy for Postponing Eviction?

Tax Seminar Helps MMJ Newbies in Arizona