LA’s Number of Unlicensed Cannabis Shops Is Actually Dropping


On Thursday, the Los Angeles County Department of Public Health hosted a webinar delving into the impact of retail cannabis sales, both licensed and not, with recommendations on how to improve current policy.  

Early on, Will Nicholas, director of the department’s Center for Health Impact Evaluation, addressed the effects of unlicensed retailers on communities by referencing a report he and public health colleagues prepared in July. 

Overall, he noted, the number of unlicensed shops has decreased since January 2018. At the same time, the number of licensed retailers showed an upward trend. Both trends, however, appear to have reached a plateau in December 2018. The report also found that unlicensed shops are more concentrated in census tracts with higher percentages of Latino and African American residents, as well as in regions with higher concentrations of liquor stores. 

Additionally, the report found that every additional unlicensed shop per square mile in a census block “was associated with about four additional property crimes and five additional violent crimes.”

The director then discussed sales and inventory. At licensed retail shops, the focus is typically on flower, capsules, tinctures, and topicals, Nicholas said. In contrast, illicit market shops lean toward moonrocks (bud dipped in hash oil and then dipped in kief), edibles, and, to a lesser extent, flower. 

According to the report, California’s July 2018 shift to new product testing, labeling, and packaging regulations may have unwittingly fueled the unlicensed market by “flooding it with large quantities of cheap products.” 

Moreover, because unlicensed operators tend to target younger, more price-conscious consumers, “licensed operators are diversifying their products to attract a more discerning clientele.” As a result, said Nicholas, some patients, “including those under physician supervision, are experiencing difficulty finding and affording the products they seek.” 

The Los Angeles County of Department Health, he noted, is also concerned about the disconnect between consumer trends and federal policy. Currently, Nicholas noted, there are no federal guidelines on pesticide use for cannabis cultivation. Plus, because of federal prohibition, state product testing is relegated to private labs, which creates potential conflicts of interest. Pesticide levels, he added, have been found to be ten times as high in concentrates than in flower, so “vaping and dabbing are a highly efficient method for inhaling contaminants.”

Nicholas then moved on to discuss cannabis-impaired driving, noting that while his report found “robust evidence that cannabis use increases the risk of traffic crashes,” there is mixed evidence of the effects of legalizing cannabis on traffic collisions. In fact, said Nicholas, “several studies have shown no effect or a reduction in crash fatalities” post legalization. However, his research did find “evidence of persistent disproportionate enforcement on racial/ethnic minorities” after legalization. In fact, though the rates of cannabis-related arrests in Los Angeles County have significantly dropped overall, African American and Latino residents are still arrested at a higher rate than whites.

Because THC can be detected in the body “possibly up to one week after consumption,” Nicholas added, the subject of cannabis-impaired driving is a “tricky issue” that “should not be taken lightly.” Given that there is no consensus as to the amount of THC that would render a driver impaired, even police officers who have undergone Drug Recognition Expert training rely on behavioral (hand-eye coordination) evidence, which some critics argue leaves too much room for discretion. Between 2013 and 2017, Nicholas added, the bulk of cannabis-related emergency room visits have been associated with symptoms like abdominal pain and anxiety, not vehicle injury.  

From the reports’s fifteen recommendations, Nicholas discussed: 

(1) shutting off water and power, padlocking the entrances, and fining the operators at all unlicensed dispensaries

(2) establishing a phased-in local cannabis tax system “that starts low and gradually increases”

(3) monitoring trends in cannabis-related emergency department visits by race/ethnicity and age, in comparison to alcohol and other drug-related visits

(4) developing scoring guidelines for cannabis retailer locations that will add points to applicants near concentrations of unlicensed dispensaries and subtract points from those near high concentrations of liquor stores

(5)  implementing an emblem program to assist consumers in recognizing authorized retailers.  

During the webinar, Cannabis Wire pointed out that, earlier this year, state Senator Steven Bradford and the Los Angeles Department of Cannabis Regulation co-developed Senate Bill 658, which would have established a statewide emblem program for authorized retail businesses. The bill, however, failed to make it through this year’s legislative session.

When asked if the Department of Public Health is in conversation with lawmakers about possibly re-introducing a similar bill in January, Nicholas told Cannabis Wire: “I don’t know about Los Angeles County involvement with the proposed state law for a statewide emblem program. However, in Los Angeles County, we are instituting an emblem program linked to our health inspections such that retailers who pass their health inspection (which is required for licensure in almost all of the county’s cities allowing cannabis licensing, include the city of Los Angeles) receive an emblem to display in their window. A statewide emblem law would supersede this, but it sounds like we don’t yet have a decision from the state on this.”

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