How To Spot LA's Many, Many, Many Illegal Pot Shops

A green cross indicating medical marijuana is seen in the window at the Higher Path dispensary in the Sherman Oaks area of Los Angeles, California, Dec. 27, 2017. (Photo by Robyn Beck/AFP/Getty Images)

Los Angeles is cracking down on illegal pot shops — again.

L.A. City Attorney Mike Feuer announced Friday the Los Angeles Police Department has helped his office bring forward 120 criminal cases against 515 people connected to 105 cannabis businesses.

It's the second wave of crackdowns in the city this year, and punishments for the misdemeanor charges could include up to six months in jail and fines of $1,000.

Back in May, Feuer charged 142 people over illegal pot business activity. But the threat of criminal prosecution hasn't stopped many of the city's other unlicensed operators.

"Our message is clear," Feuer said in a news release. "If you are operating an illegal cannabis business you will be held accountable."

ISN'T THIS JUST A GAME OF WHACK-A-MOLE?
A little bit.

The city attorney's office provided addresses for the businesses it's prosecuting. They say the businesses include unlicensed shops, as well as grow sites, extraction labs and delivery companies. Here's where those 105 businesses are located:

But there's plenty more where that came from.

SO WHAT'S THE POINT?
More than eight months into California's legalization of recreational marijuana, many of L.A.'s legal pot shops are still struggling. That's because they have to compete with hundreds of unlicensed shops that offer lower prices by skirting taxes and regulations.

In L.A., getting a pot shop license takes time. There are strict rules, and the city's schedule for processing license applications has been slower than expected.

Earlier this year, the city gave temporary approval to existing dispensaries that have been playing by the city's previous rules for medical marijuana businesses.

Recently, the city has been focused on license applications from the city's existing non-retail businesses, like growers and manufacturers. But there's still no word on when it will start accepting cannabis business license applications from the general public.

Marijuana on a scale at a dispensary in Los Angeles, California on Feb. 8, 2018. (Photo by Frederic J. Brown/AFP/Getty Images)

On top of that, prices are much lower at illegal shops. It's not uncommon to see similar pot going for half the price at unlicensed shops.

Why? Licensed shops have to pay state and local taxes, which get passed on to the customer.

Once the state levies its 15 percent excise tax, and the city adds its 10 percent gross receipts tax, and sales taxes add about another 10 percent, recreational pot prices at legal shops are significantly higher than at unlicensed shops.

"We just can't compete with these illegal dispensaries that are undercutting us... If they make [taxes] lower and actually let us compete against the illegal dispensaries, then we would see a return of our long-time customers," La Brea Collective president Daniel Sosa told KPCC in May.

HOW CAN I TELL IF A POT SHOP IS ILLEGAL?
L.A.'s Department of Cannabis Regulation maintains an online list and map of the city's 163 licensed businesses. If a shop is not on the list, the city wants customers to avoid it.

However, popular sites like Weedmaps — think of it like Yelp for pot — list all kinds of businesses, licensed or not.

For example, here's what part of Downtown L.A. looks like on the city's map of licensed businesses:

The city's cannabis regulation department has a map of licensed L.A. pot businesses. Here's what it looks like in part of downtown LA, Sept. 7, 2018.

And here's what the same area looks like on Weedmaps:

Weedmaps gives its users results for many businesses that are not on the city's list of licensed pot shops, Sept. 7, 2018.

Stores on sites like Weedmaps advertise their prices. For customers who don't know (or don't care) that certain businesses aren't licensed, why wouldn't they pick the spot with the cheapest prices?


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