L.A. Cannabis Regulators Cut Power to 139 Unlicensed Dispensaries

In 2019, Los Angeles city officials took some creative approaches to shut down unlicensed marijuana dispensaries that had been undercutting the legal marketplace. A new city ordinance gave them authority to cut power to 139 black-market cannabis shops. Despite those efforts, however, some shops kept selling by running their stores on generators.

Shutting Down Illegal Shops

The L.A. regulators planned to go one step further by expanding safety inspections from the Fire Department and the Building and Safety Department. City Councilman Marqueece Harris-Dawson was determined to eliminate unlicensed dispensaries in his South Los Angeles district. As a result, he proposed a measure that would let law enforcement padlock, board up, or fence off illegal cannabis retailers.

Discussing his district, Harris-Dawson noted, “We have over 70 illegal dispensaries in our district and dozens are still listed on platforms like Weedmaps. Illegal dispensaries poison our neighborhoods and their own customers by operating dangerous, unregulated businesses. Additionally, these illegal actors make it difficult for legal dispensaries to operate successfully, including Cannabis Social Equity Program participants.”

Cannabis Enforcement Task Force

Fortunately, Weedmaps had recently changed its policy on listing and advertising unlicensed dispensaries. This gave regulators more standing to take a proactive enforcement approach. As a result, that Wednesday, Mayor Eric Garcetti, the chiefs of police and fire, and three city department heads announced the formation of the Cannabis Enforcement Task Force. The task force would pursue both criminal and civil charges against any entity that owned or operated illegal shops.

The Cannabis Enforcement Task Force wasted no time. That same Wednesday, it shut down an unlicensed dispensary in South Los Angeles. Officials served a search warrant on an illegal shop at 8931 S. Broadway, closing the storefront indefinitely.

Long-Term Black Market Strategy

Cat Packer, executive director of the Los Angeles Department of Cannabis Regulation, pointed out that “Shutting down these persistent offenders will help to create more opportunities for legal cannabis businesses to contribute to their communities and the city while draining resources from the illegal market.”

Even so, rooting out black-market retailers proved difficult, since consumers kept seeking the lowest possible prices. Until perceptions changed and most unlicensed dispensaries were shut down, there would always be customers chasing the best deal despite the safety risks.