New Bill to Increase Fines for Allowing Illegal Cannabis Dispensary Operations

For immediate release:

Landlords Will Be Assessed Penalties for Providing Space to Illegal Shops

LOS ANGELES, California – (February 6, 2020) – A new law (AB 2094) proposed by Assemblymember Reggie Jones-Sawyer (D-South Los Angeles) would increase fines up to fifty thousand dollars ($50,000) per violation for landlords who knowingly provide space to cannabis dispensary shops operating without proper licensing from the state, county and/or city.

“As the Chair of the Assembly Public Safety Committee, I am concerned about the prevalence of the illicit cannabis market,” said Assemblymember Jones-Sawyer. “The voters and the Legislature have spent time and careful consideration in drafting regulations that ensure the health and safety of Californians.  Law-abiding businesses have spent time and resources to become compliant with cannabis regulations yet are struggling to compete with the illegal market because they can offer a cheaper product to consumers. This measure is crucial to helping the legal cannabis market grow in California and rewarding businesses that play by the rules.”

The Bureau of Cannabis Control (BCC) and the Department of Consumer Affairs’ Division of Investigation-Cannabis Enforcement Unit (DOI-CEU) has recently taken enforcement action on two unlicensed cannabis retailers operating in Southern California, including an unlicensed retailer in Los Angeles. The collaborative operation along with the assistance of the Los Angeles Police Department resulted in the seizure of $113,220 in cannabis products, which included approximately 190 illicit vape cartridges.

According to the BCC all commercial cannabis activity in California must be conducted on a premise with a valid license issued by the appropriate state cannabis licensing authority. Manufacturing, distributing or selling cannabis goods without a state license or at a location that is not licensed is a violation of state law.

Proposition 64 passed by California voters in 2016 allows for medical and recreational marijuana use in the state. According to recent statistics, The City of Los Angeles currently has listed 184 licensed dispensaries with over 1,700 operating unlawfully.

Under the proposed new law, any person who has management over a building, who knowingly rents or leases a space for the purpose of illegally manufacturing or selling cannabis could face a fine of $50,000 per day if convicted. Current fines have a maximum penalty of $30,000.

The proposed law would update section 11366.5 of the Health and Safety Code and is expected to have bipartisan support in the State Legislature.