In the measure, the Board notes “the transition to a legal cannabis marketplace has faced challenges, including high taxes and barriers to entry for legal dispensaries and cultivation facilities.”
“These challenges have led to a continued unregulated market for cannabis, including many unlicensed dispensaries in some communities. Unlicensed dispensaries are problematic for many reasons, including that their products are untested and may be mislabeled; they do not pay taxes; they promote the illegal cultivation of cannabis, which often comes with many environmental impacts; and their lower prices undercut the legal market.” — “Deplatforming Unlicensed Cannabis Dispensaries,” 9/24/24
The measure adds that unlicensed dispensaries “are also often the targets of violence due to the large amounts of cash on-hand and the reduced likelihood of their illegal operators reporting crimes to law enforcement.”
According to a Pew Research Center study released in February outlined in the measure, Los Angeles County is home to about 10% of the total number of dispensaries estimated to operate nationwide, with nearly 1,500 retailers. However, California Department of Cannabis Control data indicate that, as of 2022, only 384 of those dispensaries hold valid state and local licenses.
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