In a significant blow to medical marijuana caregivers in Los Angeles, the city council voted Tuesday to limit the number of allowed dispensaries to just 70, ultimately forcing hundreds of shops out of business.

Almost 1,000 dispensaries operate in Los Angeles today. The drug was authorized for sale for medicinal purposes in 1996.

The city council said on Tuesday 137 dispensaries would remain open for now, but it intends to reduce the number to no more than 70 over time.

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The council also decided to enact a series of new restrictions in the sale of marijuana.

“Councilman Jose Huizar proposed a cap to ensure that dispensaries would not be concentrated in any one neighborhood,” The Los Angeles Times added. “Currently, with no ordinance in place to control their location, dispensaries have clustered in some neighborhoods, such as Eagle Rock, Hollywood and Woodland Hills, drawn by empty storefronts or by proximity to night life.”

Because of the council’s concerns, if a dispensary wants to stay in business it must abide by new restrictions “including staying several hundred feet away from any school, public park, religious institution, licensed child care facility, youth center, hospital or rehab facility, and other collectives,” noted The Los Angeles Independent.

The council’s move against the pot shops comes following threats by the district attorney, who claimed “about 100%” of medical marijuana dispensaries are operating illegally by selling the drug to patients over the counter in a storefront setting.

Over the counter sales of marijuana to licensed patients accounted for some $18 million in tax revenue last year, according to The Christian Science-Monitor, during a time when California is facing the greatest budgetary challenges in its history.

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There are three voter-sponsored initiatives circulating California at the moment which seek to put complete legalization and taxation of marijuana on the state-wide ballot in 2010, the Orange County Register added.

“If one of these initiatives passes, California would become the first state to legalize marijuana and impose a tax on it, a move proponents say could help get the state out of an unprecedented budget crisis,” the paper reported.

With AFP