What Does “Pre ICO” Mean For A Dispensary?

Pre ICO Image

If you’re in the marijuana business in Southern California, you may hear the phrase Pre ICO describing a retail dispensary and wonder what it means.

With the 2016 legalization of recreational pot, Pre ICO as a designation for Los Angeles marijuana stores will likely be an obsolete term in the near future. It’s a relic of draconian zoning practices by the city throughout the past decade limiting the number of cannabis outlets in the city.

Under current city code, only those shops who registered with the city in 2007, before an interim control ordinance (ICO) moratorium went into effect, are allowed to operate legally. Hence the term Pre ICO.

The interim control ordinance is the moratorium Los Angeles City Council adopted in 2007 on new medical pot shops in the city, an allegedly temporary ban on new dispensaries until the council could come up with a set of zoning laws to govern where and how dispensaries could operate and what kind of taxes they should pay.

Council members figured they had to do something to stem the burgeoning market for medical marijuana and the dispensaries that popped up all over the city to service it. One councilman asserted in 2007 LA pot shops outnumbered LA Starbucks locations two-to-one.

LA Starbucks vs. Pre-ICO Dispenaries
A subset of the Starbucks locations in Los Angeles County. There are far more dispensaries, few of whom are pre-ICO

Research from the University of California Los Angeles, which has an entire department devoted to studying the proliferation and effects of neighborhood dispensaries, disputes this characterization. But the assertion reflects a deep concern among some residents at the time.

Why were there so many marijuana dispensaries in 2007?

California voters passed the Compassionate Use Act in 1996, making it the first state in the U.S. to legalize marijuana for medicinal purposes. Bureaucrats and legislators still had to hash out the specific rules to regulate it, however. As of 1996, it was legal to have weed with a prescription. But, aside from growing it yourself, how you were supposed to get it was a legal grey area for a long time.

CA Counties that passed Prop 215 for Pre-ICO
Counties in CA that were either For or Against Prop 215 (The compassionate care act)

Something needed to give, however, because any marijuana farmer knows growing cannabis is a complex process that involves sexing the plants, cloning, preventing the proliferation of male plants to avoid pollination of the flowers, administering precise nutrient mixtures and other concerns. People with Cancer, AIDS and chronic pain aren’t necessarily equipped to plunge into a demanding and expensive horticulture hobby, let alone one on which they depend for medicine.

Enter the California State Legislature. In 2003, state lawmakers passed the Medical Marijuana Program Act, which created a legal framework for growers and patients to form non-profit collectives. Patients could band together to offer reasonable expense reimbursement for partnered non-profit growers to produce the plant. It didn’t take long for the industry to come up with the nonprofit dispensary model.

Four years later — in 2007 when council adopted the ICO — the city boasted at least a few hundred dispensaries, all built according to the rules of the Medical Marijuana Program Act.

Why is Pre ICO still an important designation in Los Angeles?

The interim control ordinance allowed for existing cannabis outlets to register with the city clerk by November of 2007  to continue operating while city officials came up with new rules. More than 180 took the city up on its offer.

The trouble was, the new regulations city officials presented in 2010 reduced the limit to 70 and imposed a number of other severe restrictions on marijuana collectives.

As a result of legal wrangling, subsequent ballot measures, and angry political back-and-forth (see the CA Cannabis Timeline), the City Council kept falling back on this Pre ICO number of dispensaries in the city as a limit for the number of shops in the city.

What is the future of Pre ICO as a designation in Los Angeles?

Now that California voters passed Prop 64 in the November 2016 election, which legalized recreational weed, it looks like the ICO limit is in the twilight of its relevance.

Prop 64 gave state and local officials until 2018 to come up with the specific rules for governing the commercial trade in marijuana.

In a March 2017 municipal election, Los Angeles voters passed Measure M. This law gives the LA City Council power to tax and regulate marijuana shops, similar to way they do liquor stores and bars.

In response, the council in June 2017 published a draft proposal of zoning ordinances. The draft includes distance requirements from schools and community centers, taxes, operations restrictions and other typical code regulations.

Legal Los Angeles dispensaries were, as of September 2017, still required to have a Pre ICO designation to continue operating, but it looks as if that won’t be the case once a final ordinance comes before council.

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About Adam Townsend 28 Articles
Adam Maxwell Townsend has been a journalist for 15 years. His reporting has covered science, technology and medicine. Currently, he edits and writes medical and pharmaceutical articles for consumer websites, including WoahStork.

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