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Walk the streets of Los Angeles and you’ll see almost as many dispensaries as you do palm trees. Can you tell which dispensary is licensed by the state and which isn’t just by looking at it? How about by smoking the flower? Probably not.

The issue of illegal marijuana businesses is nothing new to residents and regulators in California. There are only about 182 authorized dispensaries in Los Angeles, but Curbed estimated there were around 1,700 dispensaries operating throughout the city as of October 2018.

For years, California has been trying to get a handle on the illegal dispensaries and delivery businesses operating all over the state. Now, it looks like Los Angeles means businesses.

Sued by the City

As reported by the LA Times, the city of Los Angeles is suing a Los Angeles dispensary for selling marijuana contaminated with pesticides. The unauthorized dispensary, Kush Club 20, was illegally operating for about a year.

The city is claiming the dispensary was selling marijuana contaminated with the pesticide paclobutrazol. According to Maximum Yield, paclobutrazol is used as a fungicide and growth regulator that restricts top growth of marijuana plants. The state of California has deemed it unfit for use on food products. In terms of marijuana, they’ve classified it as a Category 1, meaning the sample will fail if tests detect any residue of the Category 1 substance.

The city has shutdown illegal dispensaries in the past, but this case will be different than those that came before it. This time, the city is asking for monetary punishment, seeking $20,000 for every day illegal activity occurred at the shop.

Better to Over-Regulate or Under-Regulate?

The issue of over-regulation is a common woe of the cannabis industry. Each state gets to make their own rules, but no one really knows how to successfully regulate a history-making industry like cannabis. As a result, many states go over the top.

For example, take Ohio: Regulation holdups meant it took years for medical consumers to finally gain access to cannabis. Oklahoma, on the other hand, was able to get their industry up and running in record time. They’re both fairly immature, so only time will tell how each approach turns out.

Regulations are seen as a generally stifling aspect of any industry. But regulations done right are invaluable. Cannabis is a plant that we put into our lungs, bloodstream, and skin. Whether you smoke it, vaporize it, or eat it, you’re still allowing it into your body in some way. Just like with the food industry, there need to be regulations in place to ensure unknowing consumers don’t ingest something potentially harmful.

It’s widely known that California makes it very difficult to get all the approvals needed to open a shop. They also give out temporary licenses, putting some shops in a state of limbo. On top of that, there’s a battle going on about delivery in California. Many cities have banned marijuana businesses completely and are upset that residents may be able to get marijuana delivered to them in those areas. California is a huge state that’s not easy to regulate and keep track of, so it’s not shocking that unauthorized businesses have opened up and found success in this confusing time.

This case isn’t extremely common. Hundreds of illegal dispensaries operate across Canada, Michigan, California, and other states, and not all of them are being sued for selling contaminated marijuana. To be safe, California has a helpful list of authorized dispensaries in California for consumers to double check.

Balance is the most important part. Over-regulating often means cannabis deserts, high prices, impossible licensing standards, and a slow start. Under-regulating can mean compromised product and consumer safety, and too much competition. It’s a multi-faceted issue, but figuring out a clear process for dealing with unauthorized dispensaries is extremely important.