Los Angeles Prioritizes the Shuttering of Unlicensed Cannabis Businesses

The city of Los Angeles wants to shutter all unlicensed cannabis businesses. Unlicensed cannabis businesses are not paying taxes or following cannabis regulations. This raises public safety concerns. In July of this year, the City Council directed the city’s agencies to draft a report on enforcement operations including cannabis enforcement data and cost of operations. In the report dated November 9, 2018, the Los Angeles Police Department’s (LAPD) indicated that, over the past year, it executed 143 search warrants on unlicensed businesses, and made 435 arrests. The LAPD confiscated 67 firearms, over $600,000 in money and 34,852 pounds of cannabis. The arrests did little to stop the reopening of the unlicensed businesses. The LAPD indicated that additional enforcement efforts are needed as the misdemeanor charges for most violations is not adequate.

Los Angeles is defining the jurisdictional responsibility for enforcing cannabis licensing requirements. The LAPD is responsible for significant criminal activity or complaints. The Department of Cannabis Regulation (DCR) is responsible for developing enforcement strategies that will close unlicensed cannabis businesses. At a November 29, 2018 meeting, the Cannabis Regulation Commission voted to recommend that the Los Angeles adopt regulations to permit city officials to:

  • Cut off utility and power services to illegal cannabis businesses;

  • Bring enforcement actions against employees of unlicensed cannabis businesses;

  • Barricade, lock, or fence unlicensed businesses that fail to comply with a cease and desist orders

  • Permit Building and Safety Inspectors to perform non-criminal enforcement of illegal cannabis businesses;

  • Require licensed businesses to display a placard so that the public can identify a licensed cannabis business;

  • Force an eviction process by sending a cease and desist order to landlords; and

  • Notify business partners, creditors, banks etc. that the cannabis business is illegal.

These creative enforcement strategies rely on local ordinances to prevent illegal businesses from obtaining a brick-and-mortar storefront. The bigger challenge will be addressing transient business models such as delivery services.