As multiple wildfires rage across Southern California, cannabis dispensaries in the greater Los Angeles area are attempting to maintain operations while preparing for potential evacuations amid deteriorating conditions, sources told Green Market Report early Wednesday.

Four major fires – the Palisades, Eaton, Hurst and Woodley fires – have burned more than 5,000 acres combined as of Wednesday afternoon, forcing thousands to evacuate and leaving many businesses, including the region’s cannabis retailers, to make difficult decisions in an already economically battered market.

The Los Angeles Fire Department issued mandatory evacuation orders for large swaths of Pacific Palisades, with the evacuation zone stretching from the Pacific Coast Highway to Topanga Canyon Boulevard. Similar orders are in effect for parts of Pasadena near the Eaton Fire, ABC7 reported.

“Right now there’s a lot of places in the surrounding areas that are not open,” said Gilbert Romero, who works security at Harvest dispensary in Santa Monica. He said falling ash and smoke are visible but operations continue at the location. “We’re getting a lot of new people from other places because their places are closed.”

The fires, driven by Santa Ana winds reaching up to 60 mph with gusts of 100 mph in some areas, have forced several dispensaries to close, including the prominent 99 High Tide dispensary in Malibu, sources confirmed. Others reported they’re operating without clear guidance or emergency protocols from management. Green Market Report attempted to reach a number of operations bordering to the impact zones, such as Cookies in Brentwood and a Green Thumb Industries store off Wilshire Boulevard.

“Unfortunately, no one communicates these things with us, so I genuinely have no idea,” Lexi Hatch, a 24 year-old budtender at Farmacy Westwood near UCLA’s campus, told GMR around 11 a.m. PST on Wednesday when asked about contingency plans. Hatch, who moved to Los Angeles from Boston four months ago, said that she was keeping watch on news updates while continuing regular operations.

Some dispensaries, though, do have clearer protocols. At Erba Collective off Pico Boulevard, a front desk worker who identified herself only as Alex said they were “perfectly fine right now” but noted they were located just “10, 15 minutes away from Santa Monica.”

The situation remains particularly tense in Santa Monica, where Harvest’s Romero reported seeing black smoke, which is indicative of active burning.

“If we choose to stay open and it’s left to us, we’re gonna do it. Unless we see a fire,” he said, adding that ultimate closure decisions would likely come from city authorities.

At Xzibit West Coast Cannabis in Bel Air, Jordana Shank, a 27-year-old budtender, said management informed staff they would maintain regular 9 a.m. to 10 p.m. hours unless directed otherwise by authorities.

“Whenever the fire department shows up and says we need to evacuate is when we would close our doors,” Shank noted.

The fires have created a patchwork of closures across the normally bustling cannabis retail landscape. Cookies dispensary locations “up that way going towards L.A.” have reportedly closed, according to Romero, while some beach-adjacent locations remain open.

Banding together

Industry leaders are monitoring the situation closely while coordinating support efforts through informal networks, such as a text thread of approximately 50 dispensary owners who share updates and offer mutual aid. Jerred Kiloh, president of the United Cannabis Business Association and a 25-year veteran of cannabis retail, reported that several dispensaries in evacuation zones have already shut down, with many delivery services suspending operations to keep drivers off the roads.

Carlos De la Torre of Cornerstone Research reported being just two miles from an evacuation zone, Kiloh noted, adding that smoke conditions were also significantly affecting customer traffic, as residents heed official recommendations to stay indoors.

“When resources are spread thin, you kind of have to rely on each other,” Kiloh said, noting that the industry has developed informal mutual aid networks following previous crises. He expressed particular concern about insurance coverage, explaining that many operators have had to reduce coverage due to high premium costs.

“Fire insurance is not usually on a lot of commercial insurance plans. And when you pay this much insurance just as cannabis, you got to pick and choose what is high risk and what is not,” he said.

In prepared remarks emailed to GMR, the California Cannabis Industry Association expressed concern about both immediate and long-term impacts on businesses and their employees, “particularly those already navigating economic and regulatory hurdles.”

The organization said that the Department of Cannabis Control is making disaster relief available to affecetd licensees, who can evacuate cannabis products without prior authorization if facing immediate fire threat.

Aside from retail, there are growing concerns about potential impacts on indoor cultivation facilities in the region. While Los Angeles County prohibits outdoor growing, indoor facilities could face challenges from smoke infiltration.

“If you’re pulling smoke into your grow room, there’s really no way to get rid of it,” Kiloh explained, referencing past incidents where smoke contamination affected crop quality during Northern California wildfires.

Rhode Island marijuana regulators on Wednesday released a new draft of rules for how they intend to go about expanding the recreational cannabis market, but they also made clear that the regulations have a ways to go before they’re finalized.

At issue is exactly how the state Cannabis Control Commission will pick 24 new dispensary license winners, The Providence Journal reported. Currently, the commission is planning to use a “hybrid” method, wherein commissioners would first vet license applicants, and then compile all qualifying entrepreneurs into a lottery for the two dozen retail permits.

But one of the three-member commission vocally opposed such a plan, arguing that a merit-based scoring system would be better than a lottery, The Journal reported.

“We won’t be able to consider which applicants have the better plans, only that they have a plan, and then they’re in the lottery,” Commissioner Robert Jacquard said. “So, I think that is unfair to the applicants that put the most effort into this and have the best overall plans.”

Jacquard was overruled by his two counterparts, however, who asserted that such processes have only led to endless litigation in other states that have tried standing up new marijuana markets with limited license models.

“That’s how other states have been sued to great success,” Commission Chairwoman Kim Ahern said. “So my goal is to avoid further delay, which is a theme we’ve heard in every public comment period we’ve had.”

There are already two pending lawsuits filed against Rhode Island over its marijuana permitting plans. Those claims challenge the legality of a residency requirement for licensure and the parameters of its social equity program. Because of those coming legal hurdles, Ahern said it’s not clear if any new dispensaries will be opened this year, The Journal reported.

The new rules will go through a 30-day public comment period next, before the commission revisits the topic. Further changes could be made before final adoption.

Currently, there are only seven legal dispensaries serving the entire state of Rhode Island, though two others are licensed by not yet open. The 2022 law that legalized recreational marijuana also mandated a phased-in expansion of the industry, which means the state will eventually have 33 operational adult-use cannabis shops.

Annual legal marijuana sales at licensed dispensaries in Nevada have steadily decreased each year since the market peaked in 2021 at just over $1 billion, and during the last fiscal year sales totaled just $829.2 million, largely thanks to a burgeoning illicit trade.

According to data from the Nevada Cannabis Compliance Board, the state’s underground marijuana market is worth between $242 million to $370 million in sales annually, The Nevada Independent reported, which is between a quarter and a third of all cannabis sales in the state.

Legal cannabis sales in 2022 declined to $965 million, then went down in 2023 to $848 million, and dipped once more last year, according to state figures.

But due to a lack of enforcement powers, the CCB is basically helpless to crack down on the surging illegal trade, The Independent reported. The regulatory agency is only allowed to oversee legal licensed businesses and doesn’t have police enforcement powers to go after unlawful operators.

“Who is going to provide the enforcement?” CCB Chairwoman Adriana Guzman said. “Because CCB doesn’t have the enforcement to be able to do those crackdowns. I mean, you would have to do undercover rings and bust these people, right?”

Layke Martin, executive director of the Nevada Cannabis Association trade group, also noted that various state rules often steer consumers to illicit sources – such as a ban on dispensaries on the Las Vegas Strip – and there’s a lack of real enforcement tools for the CCB.

Although a report from the CCB optimistically projected that the illicit market would shrink before the end of the decade, Martin told The Independent that that’s wishful thinking without a meaningful crackdown. She pointed to statistics from the U.S. Drug Enforcement Administration, which reported seizing twice as many illegal cannabis plants in 2022 as it did in 2021 in Nevada.

“Everything that we’re seeing in the market is actually the opposite,” Martin said. “Until we’re putting resources into enforcement to shut these businesses down, there’s no reason these unlicensed sales are going to stop.”