Southeastern Los Angeles County is quickly emerging as the epicenter of the region’s burgeoning aboveboard cannabis marketplace as several Gateway cities look to license marijuana businesses.

With the city of Los Angeles still months away from voting on a ballot measure that would give the council authority to implement a licensing system, Lynwood, Maywood, and Huntington Park are seen as easier entry points for entrepreneurs and investors, among them Aaron Herzberg, a principal at Santa Ana marijuana real estate investment firm CalCann Holdings.

But opportunities are limited. For example, Huntington Park has only granted licenses to three medical dispensaries, and Lynwood will allow as few as five cultivation and manufacturing sites. Meanwhile, Lynwood and Maywood’s ordinances are not yet finalized, and it’s unclear whether their permits will allow recreational operations in addition to medical marijuana businesses.

“The reality is there are a lot of people who will apply for licenses that won’t get them,” said Herzberg, who owns a dispensary in Santa Ana and has already scooped up two properties in Lynwood manufacturing zones. “It takes a lot of financial resources to get things up and running, and most people don’t have the capital to make the upfront investment.”

Meanwhile, statewide regulations are still in flux as politicians and regulators scramble to meet mandated deadlines. A bill introduced last week in the state Assembly would harmonize the provisions of Proposition 64, which made recreational pot legal in November, and the Medical Cannabis Regulation and Safety Act, which legislators passed last year.

Still, the opportunity for huge profits has speculators snapping up buildings in areas where favorable zoning laws will likely allow marijuana businesses to operate. (See story on page 1).

While Herzberg said he’s heartened at the progress made toward licensing cannabis businesses in the southeast county, he’s mindful that operations will likely take a significant amount of time to come on line.

“It always takes longer than people expect,” Herzberg said. “We don’t get involved unless there’s strong support from the city council.”

Local control

While councils in southeast county cities have shown more support for marijuana businesses than almost any other place in the region, there are still divisions.

In Lynwood, where the City Council passed an ordinance on Dec. 6 allowing marijuana cultivation and manufacturing but not retail storefronts, dozens of speakers advocating for each side pleaded their cases before the vote. After the ordinance passed 3-1, opponents chanted for a recall of the council members who voted for the pot law.

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