Commercial Marijuana Stores In Long Beach, Antelope Valley And Portions Of Los Angeles Targeted With Warning Letters And Asset Forfeiture Lawsuits Filed By U.S. Department Of Justice

LOS ANGELES – The latest federal enforcement actions against the commercial marijuana industry in California came today as federal authorities moved against 103 illegal marijuana stores across Los Angeles County.

Out of the 103 storefronts targeted today, federal authorities sent warning letters to 28 stores in Long Beach, 71 in Los Angeles, and four in the Antelope Valley. Two of the stores in Long Beach are housed in buildings that are the subject of asset forfeiture lawsuits that were filed today in United States District Court.

Today’s federal actions involve all known marijuana stores in the City of Long Beach; the City of Lancaster; the high desert community of Pearblossom; and the parts of Los Angeles served by the Newton, Rampart and Harbor divisions of the Los Angeles Police Department.

In federal court this afternoon, prosecutors filed two asset forfeiture lawsuits against properties in Long Beach where marijuana stores are currently operating. The two civil asset forfeiture complaints state: “Under federal law, the distribution of marijuana (a Schedule I controlled substance under Title 21) is prohibited except under very limited circumstances not applicable here. The government further alleges on information and belief that the operation of a marijuana store on the defendant property was not (and is not) permitted under California law.”

The forfeiture lawsuits allege that the owners of the properties knowingly allowed commercial marijuana stores – and, in one case, a commercial grow – to operate. The buildings in Long Beach named in the asset forfeiture lawsuits currently house:

The Healing Tree Holistic Association (in a store which, in 2011, operated under the name Royalty Collective) and a related indoor marijuana cultivation facility in a strip mall at 3721 East Anaheim Street, which have been the subject of at least five state search warrants over the past two years; and

Naples Wellness Center at 5750 East 2ND Street, which has received at least 15 administrative citations from the City of Long Beach over the past 15 months, and in April was the subject of two state search warrants executed by the Long Beach Police Department.

In February 2012, Long Beach enacted an ordinance banning marijuana stores in the city.

In conjunction with the filing of the asset forfeiture complaints, the United States Attorney’s Office today mailed out letters to the property owners and operators of 26 additional marijuana stores that are either currently operating or were recently closed in Long Beach. The warning letters give the operators and landlords 14 days to come into compliance with federal law or risk potential civil or criminal actions.

“Marijuana dispensaries have posed significant challenges to the City of Long Beach. We always welcome the opportunity to partner with federal authorities in an effort to address these illegal operations that affect the quality of life in our community,” said Long Beach Police Chief Jim McDonnell.

In addition to the marijuana stores in Long Beach, federal prosecutors sent warning letters to three pot shops in Pearblossom, one in Lancaster and 71 in Los Angeles. The areas in Los Angeles that were targeted are served by three LAPD divisions: Newton, which serves portions of South Los Angeles and downtown; Rampart, which serves areas west and northwest of downtown; and Harbor, which serves San Pedro, Wilmington and Harbor Gateway.

Today’s enforcement actions in Los Angeles County follow similar actions across the seven-county Central District of California. Starting in October 2011, prosecutors began filing asset forfeiture lawsuits and sending letters to marijuana operations in selected areas in the Central District of California (see, for example: http://www.justice.gov/usao/cac/Pressroom/2013/053.html).

With the lawsuits filed this morning, the United States Attorney’s Office has filed a total of 32 asset forfeiture complaints against properties housing illegal marijuana operations in the district. Twenty-three of those actions have been resolved with the closure of the marijuana stores and consent decrees. In some cases, consent decrees required property owners to disgorge rent payments made by a marijuana store operator, and in all cases the consent decrees required the property owners to agree, among other things, that they would no longer rent to people associated with illegal marijuana operations or the property would be subject to an immediate forfeiture to the government.

Including today’s efforts in Long Beach, Los Angeles and the Antelope Valley, federal enforcement actions – asset forfeiture lawsuits, warning letters and related activity – have now targeted more than 625 illegal marijuana businesses in the Central District of California. The majority of those businesses previously targeted are now closed, are the subject of eviction proceedings by landlords, or have been the subject of additional federal enforcement actions.

In October 2011, the four United States Attorneys in California announced the coordinated enforcement actions targeting illegal marijuana cultivation and trafficking (see: http://www.justice.gov/usao/cac/Pressroom/2011/144a.html).

As part of this project, the United States Attorney’s Office is working with the Drug Enforcement Administration and IRS - Criminal Investigation. Today’s enforcement actions involved the cooperation of the Los Angeles District Attorney’s Office.