California Considers Fines for Landlords and Companies Serving Unlicensed Dispensaries

The California Assembly has approved a measure that would levy civil fines up to $30,000 per day to those who provide building space, advertising platforms, and other aid to unlicensed operators, the Los Angeles Times reports.

The bill was introduced by Assemblywoman Blanca Rubio (D) who said that as much as 80 percent of the cannabis sold in the state comes from illegal operators. The language of the proposed law would require it to be known that a cannabis business is illegal and there to be an obvious intent to help it.

“Despite some success during the first two years of legalized cannabis sales, the illicit market has flourished. In addition to dwindling tax revenues, the underground market presents public safety and health threats to California.” – Rubio in a statement via the Times

The proposal is backed by the United Cannabis Business Association who, in a letter to lawmakers, said illegal sales “must be shut down to ensure that legal operators can see an increase of patients and consumers which creates union jobs while we contribute to local and the State of California’s tax revenues.”

Ellen Komp, deputy director of California NORML, on the other hand, argues that the bill is heavy-handed and the advocacy organization “would rather see ‘carrots’ to assist people in securing commercial licenses by lowering the barriers to entry, rather than ‘sticks,’ be they criminal or civil.” NORML said they do support an existing law requiring cannabis industry advertising platforms to include a state license number but cautioned that illegal operators display fake licenses.

In 2018, cannabis industry oversight officials sent a cease-and-desist letter to Weedmaps over their advertising of unlicensed businesses on the platform. Last August the company said they would no longer allow such businesses to advertise on the site.

The measure still requires approval from the state Senate.