Two City Council committees Monday watered down a proposed medical marijuana ordinance and forwarded the amended measure to the full City Council without approving it.   

The  version prepared by the City Attorney's Office called for banning over-the-counter sales of the drug, which would force most of the 1,000 medical marijuana dispensaries across Los Angeles to shut down immediately.   

The City Council's Public Safety and Planning and Land Use Management committees amended the proposed ordinance to allow "transactions'' among members of medical marijuana collectives, so that some members can be paid for cultivating the drug for other members.   

Councilmen Ed Reyes and Dennis Zine proposed that "cash contributions, reimbursements and compensations shall be allowed, provided it's in compliance with state law.''   

David Berger, a special assistant to City Attorney Carmen Trutanich, likened that provision to "putting lipstick on a pig.''   

"You're just going to call it something else,'' Berger said. "It is for all intents and purposes a sale -- you're just going to take away the profit element by hiking up the costs of operation.   

"If you think that's going to mean it's not a sale, I submit to you that a court of law is going to take a different opinion,'' Berger added. "They look at matters of substance, not matters of form.''   

But Berger said the proposed ordinance -- even with the amendments to which he objected -- would still result in the closure of most dispensaries.   

The two committees also directed the Chief Legislative Analyst's office to draft a separate ordinance to mirror that of West Hollywood, which allows over-the-counter sales at four dispensaries.   

Councilman Paul Koretz, who used to be mayor of West Hollywood, said the permanent ordinance proposed by the City Attorney's Office is "unworkable.''   

"I think we have one goal here, which is to provide access but at the same time eliminate the problems that medical marijuana dispensaries have been causing. And to do that, I would ask colleagues why we have to take the hardest- ass approach to the law that we could, rather than trying to take the approach that will make this as practical as possible.''   

The City Council is scheduled to discuss the proposed permanent ordinance on Wednesday.   

Under the measure, medical marijuana "collectives'' would be allowed to grow pot for members with serious illnesses but would not be able to sell marijuana for a profit.   

A collective is defined as a group of people with severe medical problems, their primary caregivers and people they authorize to cultivate marijuana for them.   

Over-the-counter sales of medical marijuana would be outlawed, and collectives would have to be at least 1,000 feet from other collectives, schools, playgrounds, child care facilities, religious institutions, public libraries, public parks, hospitals and rehab centers.

The latest version still prohibits the sale of marijuana for profit but would allow dispensaries to recoup "out-of-pocket costs of their collective cultivation.'   

It also would allow edible marijuana products that enable people to ingest the drug without smoking it, and gets rid of a provision that would have required medical marijuana collectives to provide authorities with lists of its members.   

It also broaches the concept of limiting the number of dispensaries by council district or community plan area.   

Under the proposed permanent ordinance, dispensaries that began operating before Sept. 14, 2007, and registered with the city clerk's office before Nov. 12 of that year would be given 180 days to comply with the ordinance.   

Any dispensaries that opened after Sept. 14, 2007, would have to comply with the rules immediately.   

Voters legalized medical marijuana when they approved Proposition 215 in 1996, but there has been little agreement about regulating dispensaries. Initially, only individuals were allowed to grow pot, but the law was amended in 2003 to allow collectives to grow the plants.   

California Attorney General Jerry Brown has said medical marijuana outlets are supposed to operate as nonprofit groups, but few do.   

Trutanich and District Attorney Steve Cooley have said most of the 1,000 or so pot shops in the Los Angeles area are in violation of state law.