JUDY WOODRUFF: Now: new efforts to limit the sale of medical marijuana.

Last week, the Los Angeles City Council approved an ordinance that would close many medical marijuana dispensaries throughout the city. The backlash is brewing elsewhere, too, including debate and a vote today in Colorado's Senate.

"NewsHour" correspondent Tom Bearden has our report from Denver.

WOMAN: I feel like my life is in danger. I did not purchase a house right here to feel like I can't go outside my front door.

TOM BEARDEN: For the past three months, angry residents have gathered in town hall meetings asking politicians to slam the brakes on one of the fastest growing businesses in Colorado.

MAN: We're gambling with our kids, our families, our own lives. And why not just stop everything until we actually learn something about how to run this industry?

TOM BEARDEN: The new industry is medical marijuana, specifically, the commercial dispensaries that have opened in neighborhoods all over the state. At last count, Denver alone had over 300. More than the number of Starbucks is the oft-quoted statistic.

Some residents are concerned the shops could lead to increased crime and encourage loitering near their homes. The dispensary industry has blossomed virtually overnight, with few regulations or rules, and left politicians at the state and local level scrambling to catch up.

Ten years ago, Coloradans voted to amend the state constitution to allow doctors to prescribe marijuana for medical purposes. Subsequent state regulations limited caregivers to five patients a piece. But it was still against federal law. And police continued to arrest people.

So, for years, only about 2,000 people registered as patients. Then, a court threw out the five-patient limit. And, last year, the U.S. Justice Department announced it would no longer enforce federal anti-marijuana laws in the 14 states that allow its medical use.

Marijuana dispensaries began popping up everywhere. And the patient registry exploded to 40,000 people, with 20,000 more waiting for approval in the coming m onths. That's created a huge business opportunity for people like Ryan Vincent. He's a medical marijuana user himself to relieve pain from a degenerative eye disease.

He hated buying the drug in what he described as a back alley environment. So, in November, he opened up The Health Center, which offers patients a variety of marijuana products, from traditional leaves, to brownies, to topical lotions.

RYAN VINCENT, The Health Center: I have built a very safe environment for people. It would be very safe for my own grandmother to come in here. And that is kind of the idea of how we built this place.

TOM BEARDEN: But some people think too many dispensaries have opened up in far too many places. City Councilman Charlie Brown recently led the effort for a Denver law that requires any new dispensaries to be located 1,000 feet from schools and day cares and from other dispensaries. Brown says he knows more needs to be done, but it isn't easy.

CHARLIE BROWN, Denver city councilman: It's like trying to pick your teeth with a rattlesnake. If you ever tried that, you know how hard it is.

You know, you are dealing with medicine. You're dealing with patients. You're dealing with the dispensary owners. You're dealing with neighbors, and you're dealing with schools. It all -- you can't please everybody. And, so, you compromise.

TOM BEARDEN: Vincent says he welcomes more regulation and is working hard to show that he runs a legitimate business that is not some front for dealing drugs to recreational users. For instance, he accepts credit cards and will only pay growers and suppliers with checks.

RYAN VINCENT: If we say, you know, we would like to write you a check, and they say, no, no, no, cash only, we're not working with them. And the reason being is because, we are a business. And we want those tracked ratios. We want where our money is going. We want to have a paper trail. We -- you know, at the end of the day, that is how you do business.

TOM BEARDEN: One of the criticisms I have heard from people who are concerned about whether this is being sold indiscriminately are things like the names of the products, like Afghan Diesel, Durban Poison, Juliet, AK-47.

Does that hurt your cause when you try to establish yourself as a genuinely legitimate business, that you are selling a product that has a name like that?

RYAN VINCENT: We are trying to move away from those names. One of the things that we are actually working on doing right now with the growers is coming up with some names that might be more acceptable, something that more people can use, and it would make more sense to the patient.

TOM BEARDEN: But making marijuana use more acceptable is what has many residents like Christine Tatum-Thurstone so upset.

CHRISTINE TATUM-THURSTONE: The more of these dispensaries pop up, the more we normalize this, the more that we mistake this as a substance that doesn't have any problems. Basically, what Colorado has done is, it's using the medical community as a really cheap and easy -- and it's a really cheap, easy backdoor to legalization of marijuana.

TOM BEARDEN: As various local officials in both urban and rural communities wrestle with how to deal with the dispensary issue, most people are now looking to the state legislature for a more comprehensive approach.

State Senator Chris Romer, a Democrat, originally drafted a bill that would have required dispensaries to register their products in a database and provide other health services. But he says he couldn't get the support of other colleagues. So, he scaled his bill back to one that would put an end to the practice of dispensaries paying physicians to write prescriptions for medical marijuana.

STATE SEN. CHRIS ROMER, D-Colo.: You will no longer be able to have a dispensary that has a doctor on site who is paid per prescription, because I can't think of another circumstance in medicine where we actually pay doctors for each prescription they write.

TOM BEARDEN: On the statehouse side, Republican Tom Massey is working with law enforcement groups on a bill to reestablish the old five-patient limit and apply it to dispensaries.

STATE REP. TOM MASSEY, R-Colo.: I have had a number of concerns, complaints, questions, are we trying to put dispensaries out of business? And that's clearly not the goal of this. We're trying to make sure that we have a regulatory piece that works within the framework of the doctor-patient-caregiver relationship and honors the intent of the voter for the constitutional amendment.

TOM BEARDEN: Dispensary owner Vincent says a five-patient restriction with not only put him out of business; it would drive the marijuana business back into basements and back alleys.

RYAN VINCENT: It's going to go all back underground again, which is -- which maybe is what his idea is. And then we put it all back underground and we will tick off all of the neighborhoods. And then they will all vote it out.

TOM BEARDEN: Both Republican and Democratic lawmakers say they know, whatever action they take, the issue is not likely to be resolved this session. And they concede, everything would change if the federal government decides to go back to enforcing marijuana laws.

How do you craft a state law or set of state laws to deal with an issue that is still fundamentally illegal at the federal level?

CHRIS ROMER: Well, it's difficult, but we're working on that. And the Obama administration has clearly said the states can experiment with this and create our own model. I hope we ultimately can be the people who really create the best medical marijuana laws for those chronically-ill patients.

TOM BEARDEN: Today, the Colorado Senate passed the Romer bill. It now moves over to the House.