The ordinance, if passed next week by a simple majority of the 15-member council, would cap the number of dispensaries at 70 and require them to be at least 1,000 feet from "sensitive uses" -- schools, parks and other public gathering spots.
The local law would put an end to the proliferation of pot dispensaries. As many as 1,000 have cropped up over the past few years. The ordinance would also likely force remaining clinics that comply to move to industrial areas because of the distance requirement.
Four dispensaries were open in 2005 when a local medical marijuana law was discussed by city officials -- who acknowledge the ordinance won't solve all the problems.
"I think it's a beginning point," Councilman Ed Reyes said after Tuesday's meeting. "We have to get control of this issue and shape a policy to make medical marijuana more accessible to those who need it."
While other California cities such as San Francisco, Oakland and West Hollywood have been able to regulate medical marijuana, Los Angeles city officials have discussed an ordinance for years, trying to adopt language that jibes with state law.
The number of clinics exploded this year -- more than 600 over the past 10 months alone -- despite a 2007 city moratorium prohibiting new medical marijuana dispensaries. The shop owners took advantage of a loophole known as a hardship exemption that allowed them to open while awaiting city approval.
However, more than 180 clinics qualified to remain open because they came before the ban was enacted. About 137 of those dispensaries still exist and would be allowed to remain open if they meet other requirements in the new ordinance.
Medical marijuana advocates argue the council's inability to provide clear regulations has led to the growth of pot shops in Los Angeles. Residents also have grown frustrated with the bottleneck as they've seen dispensaries creep closer to their homes.
Kristin Yoder, who runs California Alternative Caregivers in Venice, said the dispensary boom has hurt her clinic business. Her rent has gone from $2,500 per month to $7,600, and her patients have gone elsewhere.
"Other dispensaries advertise, solicit people on the streets," Yoder said. "It looks bad on us and it's because there haven't been any regulations.
Even if the ordinance is signed by Mayor Antonio Villaraigosa, dispensary owners are unsure they will be able to operate without being arrested. They have said they sell marijuana to their customers as a way to cover their expenses.
The ordinance states that "no collective shall operate for profit." However, "cash and in-kind contributions" as well as "reasonable compensation" would be accepted.
Some law enforcement officials believe any cash trading hands is illegal under state law.
Los Angeles County District Attorney Steve Cooley said his office will target pot clinics that profit and sell to people who don't qualify for medical marijuana. Cooley said he believes state law authorizes the possession, use and cultivation of marijuana for medicinal purposes but not the sale of the drug.
City Attorney Carmen Trutanich had also sought to ban sales at dispensaries, but the council ignored his advice.
Under the ordinance, dispensaries would have to close until they comply with the new local law. City officials would seek an injunction against those who don't. The ordinance wouldn't take effect until city officials determine the registration fees collectives would have to pay.
Fourteen states, including California, permit medical marijuana. Pot, however, remains illegal under federal law.