L.A. CITY COUNCIL TO WEIGH FATE OF POT CLINIC OWNERS

The owners of medical marijuana dispensaries that opened under a
loophole in the city's temporary ban on new clinics will appear
before the Los Angeles City Council today in the first of a series of
hearings called to determine whether they can continue to operate.

Council members are also expected to vote to eliminate the loophole
that allowed nearly 500 dispensaries to open and operate after the
temporary ban went into effect in the fall of 2007.

Two years ago, the council approved a temporary moratorium on new
medical marijuana dispensaries. The purpose of the interim ordinance,
which will expire on Sept. 14, was to give city leaders time to draft
regulations that limit where and how dispensaries can operate in Los Angeles.

California voters 13 years ago approved Proposition 215, which made
it legal to sell marijuana to certain patients with a doctor's prescription.

The drug is still considered illegal under federal law, and U.S. Drug
Enforcement Administration agents have raided dispensaries throughout
Southern California. However, Attorney General Eric Holder recently
announced those raids would end.

Clinics that were already established at the time the ban was
approved had until Nov. 13, 2007, to register with the city. By
submitting a business tax registration certificate, state seller's
permit, property lease and proof of insurance, those businesses were
allowed to remain open.

However, a loophole in the temporary ban allowed clinics to file
"hardship exemptions," which provide dispensary owners with the
opportunity to defend why they should continue to do business without
fulfilling those requirements. Hardship exemptions are considered to
be a routine part of city ordinances.

"We were not made aware of the consequences of that clause. Now that
we know, we're taking action to eliminate it," Councilman Ed Reyes,
chair of the Planning and Land Use Management Committee, said last week.

A total of 477 hardship exemption applications have been filed since
the ban took effect, and none have been heard by the council or its
Planning and Land Use Management Committee. The first of the hearings
are slated to take place later this morning.

Councilman Jose Huizar, a member of the planning committee,
introduced a motion in April, asking the city attorney to strike the
hardship exemption from the interim ordinance. That motion was
unanimously approved by the committee.

Of the 477 hardship exemptions filed with the city clerk, 26 are in
Huizar's 14th District, which includes Boyle Heights, Glassell Park
and El Sereno.

"While I support the spirit of Proposition 215, it is clear that many
opportunists are using the city's hardship exemption to make a quick
buck with little regard to the communities they're operating in," Huizar said.

A spokesman for the city attorney's office said the ban would remain
legally defensible without the loophole.

The permanent ordinance to regulate medical marijuana dispensaries is
expected to be discussed by the Planning and Land Use Management
Committee this afternoon.