What Do Pre-ICO and Prop D Mean for LA Dispensaries?

January 5, 2018

Marijuana in Shopping Cart — Photo by: ElRoi/Shutterstock

Proposition D is a city ordinance that protects Los Angeles dispensaries and “grants a limited immunity from enforcement to medical marijuana businesses that do not violate specified restrictions.” Prop D, which was put into effect in 2014, actually bans marijuana within the city except for compliant medical marijuana businesses and, despite common misconceptions, is not a license to sell medical marijuana. It is a defense from law enforcement following federal law that protects Los Angeles dispensaries from prosecution if they are raided and shut down by police.

What is the Medical Marijuana Interim Control Ordinance (ICO)?

Pre-ICO refers to medical marijuana dispensaries that were open before September 14, 2007, when the Medical Marijuana Interim Control Ordinance (ICO) went into effect. The ICO is a city ordinance that prohibited new dispensaries from opening and only allowed Los Angeles dispensaries already in existence to remain open, provided they registered with the City Clerks’ Office prior to Nov. 13 of the same year.

The temporary ordinance was intended to control the population of Los Angeles dispensaries until the city established permanent regulations. Those registering were required to submit a copy of the dispensary’s insurance, lease, tax registration certificate, and state seller’s permit to the City Clerk by the November deadline.

Only 135 dispensaries were granted permission to remain open and given pre-ICO status, meaning over 1,000 dispensaries would have to close down, according to the new law. There were still 1,122 Los Angeles dispensaries paying the city medical marijuana dispensary tax years later in 2015, according to the City Attorney.

Recreational Marijuana Allowed Starting in 2018

California voted to legalize recreational marijuana last year, and the new law went into effect Jan. 1, 2018. Any marijuana business that is Prop D compliant will have a 60-day advantage over any new Los Angeles dispensaries when applying with the Department of Cannabis Regulation for permits. Claire Bartels, the Los Angeles City Treasurer, confirmed that 157 dispensaries are registered to pay taxes on marijuana dispensaries so far.

Regulations for recreational marijuana dispensaries include a mandate that dispensaries reside at least 1,000 feet from schools, libraries, and parks. Los Angeles has added a 600-foot buffer zone to the state guidelines. LA dispensaries must also have security surveillance cameras installed on the property. All dispensaries must close by 10 p.m.

Most in the marijuana industry are pleased with the new regulations for the new recreational marijuana law. The state coordinator for the California chapter of NORML, Dale Gieringer, said, “In general, I think the regulations are pretty good. There are temporary provisional licenses available to handle the transition.” Others were still deciding. The spokesman for the United Cannabis Business Alliance, Kian Kaeni, said in an email that “We are still reading the state and city regulations and processing it all.”

The new state regulations have replaced the Prop D ordinance in Los Angeles now that recreational marijuana became legal on Jan. 1, 2018.