It’s a well known fact that the number of illegal dispensary store fronts in Los Angeles rival legal dispensaries. The illegal dispensaries are able to distribute at lower prices, creating a major issue for legal dispensaries.
In 2018, California’s marijuana market had a slow start. The revenue of legal sales was $160 short of former Gov. Jerry Brown’s projected budget. Many cities in California refused to allow legal cannabis sales, which created a thriving black market.
According to police estimates, Los Angeles in particular has the highest number of illegal storefronts, with more than 200 illegal operations. Times also did a review of city records and listing on Weedmaps, who are now removing all illegal operations from their directory. Many of the legal owners blamed Weedmaps for advertising these illegal dispensaries.
Illegal dispensaries make legal operations look like that bad guy, by skirting the states sale tax. Los Angeles’ struggle with illegal marijuana distribution is more severe than other cities due to their legal loopholes that allowed marijuana businesses to operate with some immunity from prosecution.
This makes it difficult to shut down the illegal operations. The city council passed an ordinance earlier this year that allowed the Department of Water & Power to shut off the utilities at illegal dispensaries. Although the shutdowns have disrupted some operations, they usually obtain an external generator and reopen their business. The long-term effect of the city’s enforcement strategies is unclear.
Los Angeles is expected to issue 250 more storefront licenses, a process that was said to begin in September.