Los Angeles is home to more medical marijuana shops than any other city. That much is certain. And more are still opening. But how many there are is usually a guessing game.
Now, however, the city has a new number: 372. That’s how many filed forms with the city’s office of finance by the Oct. 31 deadline in preparation for paying the new pot tax.
But that’s probably not the total number of marijuana businesses in the city. That’s just the number that want to be seen as playing by the city’s rules.
Asha Greenberg, the assistant city attorney who has overseen attempts to shut down illegal stores, said she believes there are at least 500. “I do hear of new ones opening up every day, either from the police department or from irate neighbors,” she said.
In 2005, when the city first tried to figure out how many pot shops it had, the police department found four. A year later, police found 98. And a year after that, when the city required dispensaries to register to stay open during a moratorium, 186 did. About two years ago, city officials believe the number may have peaked at around 850.
In March, L.A. voters approved Measure M, which requires dispensaries to pay a 5% business tax on gross receipts, 10 times more than the next-highest business rate. Janice Hahn, who was then on the City Council, proposed the tax and estimated it would raise at least $10 million. Cannabis businesses will have to pay the tax for this year at the end of February.
The City Council, however, is expected to debate a ban on all dispensaries as soon as January. A recent appeals court decision raised doubts about whether the city has the power to impose significant public safety regulations, such as restrictions on locations. And the ruling also thwarted the city’s plans to cap the number of dispensaries at 100 through a lottery.
But a ban wouldn’t stop the city from collecting the tax from dispensaries that choose to ignore it. “There is considerable precedent around the country and at the state level for collecting taxes even on illegal businesses,” said Jane Usher, a special assistant city attorney.