Hundreds of medical marijuana store owners that opened in the last couple of years in Los Angeles face a choice Monday under a new law: Shut down or face fines and arrest.
Good riddance, say the operators who aren't being forced to close (about 186 of them). Too many new businesses have given the more established shops a bad name, they say.
"This is not a social club," says Narek Davityan, owner of Hazelwood Patients Collective in the Eagle Rock neighborhood near downtown Los Angeles. "We just take care of people."
Patient care is not the focus of many of Davityan's rivals, which have become more like hang-outs, he says. Big signage and defiance of a registration law give people a bad impression of the Los Angeles weed business, according to Davityan. He thinks overall service has slipped at dispensaries as newcomers flood the market. The only thing that's held up is product–"best in the world," he says.
"We had a community before," says Davityan, referring to the days before an explosion of new shops in the past two years. "Now it's every man for himself."
Many of the marijuana dispensaries targeted by Los Angeles officials are operating illegally because they're not registered with the city (a requirement to open for business).
Davityan, 27, a former insurance agent, says he thinks his business will be OK. He does have to move his shop to follow new guidelines on dispensaries located in residential areas, but he's also on a priority list the city keeps to identify businesses that are in compliance with the law and paying their taxes.
The city will allow as many as 186 dispensaries to remain open. Those businesses are the shops opened before a moratorium on new stores went into effect November 13, 2007. But no new dispensaries will open until the number of existing stores is someday whittled down to 70 (as existing owners eventually go out of business).
In Eagle Rock, five registered dispensaries do business but Davityan estimates another 15 to 20 nearby are open illegally. The city estimates at least 400 shops opened after its 2007 moratorium, although some say that number is higher, 500 to 600.
Medical marijuana is a big business in Los Angeles. While there are no official figures into its economic impact, Richard Lee, an Oakland-based advocate and entrepreneur, has estimated the Los Angeles dispensaries do about $1 billion in sales a year. Davityan wouldn't disclose his sales.
A number of dispensaries contacted by Portfolio.com didn't want to talk about the new law or their plans. "No comment. Bye," said a man who answered the phone at Healers on Third, which reportedly opened last year in the mid-city area. One reviewer on Yelp gave the dispensary a five-star rating.
David Welch, a lawyer representing more than 40 dispensary owners who are fighting the new Los Angeles law, admits that "there are some bad apples" in the legal marijuana trade, but he says the same could be said about bar owners.
Most of Welch's dispensary clients opened after the moratorium, but he argues that the date is arbitrary and the city isn't taking into account the backgrounds and reputations of the business owners. If any dispensaries are closed, it shouldn't be based on a date they opened, and rather it should be decided on whether the business is operating in a responsible manner, he says.
Still, Welch is advising his clients to shut down by Monday. A judge will hear arguments for allowing the businesses to re-open on June 18. Last week, a California state judge, David P. Yaffe, rejected a request by Welch to grant a temporary restraining order that would keep the businesses opened.
Like Davityan, Barry Kramer, who runs the California Patients Alliance near West Hollywood, believes his dispensary will stay open because its on the city priority list for being registered and in compliance with the existing law. But like Davityan, his shop has to move under the new law.
Kramer says he likely benefits from fewer dispensaries, and maybe even becomes a marijuana super store with less competition, but "it's not something we're desiring or wanting."
As for the businesses that will be forced to close Monday: "I'm worried about our own survival," he says. "I don't waste much time worrying about the illegal operators."
NewsHawk: Ganjarden: 420 MAGAZINE
Source: Portfolio.com
Contact: Portfolio.com
Copyright: 2010 American City Business Journals
Website: L.A. Weed Whacker
Good riddance, say the operators who aren't being forced to close (about 186 of them). Too many new businesses have given the more established shops a bad name, they say.
"This is not a social club," says Narek Davityan, owner of Hazelwood Patients Collective in the Eagle Rock neighborhood near downtown Los Angeles. "We just take care of people."
Patient care is not the focus of many of Davityan's rivals, which have become more like hang-outs, he says. Big signage and defiance of a registration law give people a bad impression of the Los Angeles weed business, according to Davityan. He thinks overall service has slipped at dispensaries as newcomers flood the market. The only thing that's held up is product–"best in the world," he says.
"We had a community before," says Davityan, referring to the days before an explosion of new shops in the past two years. "Now it's every man for himself."
Many of the marijuana dispensaries targeted by Los Angeles officials are operating illegally because they're not registered with the city (a requirement to open for business).
Davityan, 27, a former insurance agent, says he thinks his business will be OK. He does have to move his shop to follow new guidelines on dispensaries located in residential areas, but he's also on a priority list the city keeps to identify businesses that are in compliance with the law and paying their taxes.
The city will allow as many as 186 dispensaries to remain open. Those businesses are the shops opened before a moratorium on new stores went into effect November 13, 2007. But no new dispensaries will open until the number of existing stores is someday whittled down to 70 (as existing owners eventually go out of business).
In Eagle Rock, five registered dispensaries do business but Davityan estimates another 15 to 20 nearby are open illegally. The city estimates at least 400 shops opened after its 2007 moratorium, although some say that number is higher, 500 to 600.
Medical marijuana is a big business in Los Angeles. While there are no official figures into its economic impact, Richard Lee, an Oakland-based advocate and entrepreneur, has estimated the Los Angeles dispensaries do about $1 billion in sales a year. Davityan wouldn't disclose his sales.
A number of dispensaries contacted by Portfolio.com didn't want to talk about the new law or their plans. "No comment. Bye," said a man who answered the phone at Healers on Third, which reportedly opened last year in the mid-city area. One reviewer on Yelp gave the dispensary a five-star rating.
David Welch, a lawyer representing more than 40 dispensary owners who are fighting the new Los Angeles law, admits that "there are some bad apples" in the legal marijuana trade, but he says the same could be said about bar owners.
Most of Welch's dispensary clients opened after the moratorium, but he argues that the date is arbitrary and the city isn't taking into account the backgrounds and reputations of the business owners. If any dispensaries are closed, it shouldn't be based on a date they opened, and rather it should be decided on whether the business is operating in a responsible manner, he says.
Still, Welch is advising his clients to shut down by Monday. A judge will hear arguments for allowing the businesses to re-open on June 18. Last week, a California state judge, David P. Yaffe, rejected a request by Welch to grant a temporary restraining order that would keep the businesses opened.
Like Davityan, Barry Kramer, who runs the California Patients Alliance near West Hollywood, believes his dispensary will stay open because its on the city priority list for being registered and in compliance with the existing law. But like Davityan, his shop has to move under the new law.
Kramer says he likely benefits from fewer dispensaries, and maybe even becomes a marijuana super store with less competition, but "it's not something we're desiring or wanting."
As for the businesses that will be forced to close Monday: "I'm worried about our own survival," he says. "I don't waste much time worrying about the illegal operators."
NewsHawk: Ganjarden: 420 MAGAZINE
Source: Portfolio.com
Contact: Portfolio.com
Copyright: 2010 American City Business Journals
Website: L.A. Weed Whacker
