Follow us
Business Featured Industry

The City of Los Angeles is Suing an Unlicensed Dispensary for Millions

los angeles dispensary
Written by Alexandra Hicks

In a first, the city of Los Angeles is seeking millions of dollars in civil penalties from an unlicensed cannabis dispensary.

In addition to being unlicensed, the dispensary – Kush Club 20 in South Los Angeles – was selling cannabis contaminated with the fungicide paclobutrazol, which is classified as a Type II toxic chemical and is often used to make golf turf more dense. Under California’s new regulations, paclobutrazol is not approved for use on cannabis. The City of Los Angeles is suing for millions of dollars in an attempt to crack down on widespread illegal cannabis sales.

The city is fining Kush Club $20,000 per day for each day that it operated illegally, which was roughly one year for a total for $7.5 million. The dispensary will also be shut down indefinitely, which likely goes without saying.

“Customers patronize illegal shops at their peril, and undermine businesses who play by the rules — and whose product is tested to protect buyers’ health,” commented City Atty. Mike Feuer in a public statement.

los angeles dispensary

Los Angeles City Attorney Mike Feuer filed the lawsuit last Monday

Illegal cannabis dispensaries have long been operating in the city’s shadows, but they’ve become especially lucrative now that that state is imposing a 15% tax on legal cannabis sales. Hundreds of new ones have appeared in recent years while only 181 dispensaries have temporary approval to sell cannabis within city limits. Regulators warned that these unlicensed shops might frequently offer products that are not up to par when it comes to quality.

“We apparently as a community care a lot about whether our romaine lettuce is contaminated, and we should. We care a lot about whether we can safely eat at Chipotle,” Feuer said at a downtown news conference. “Marijuana buyers should at least exercise that same degree of caution.”

Over the last year, the Los Angeles city attorney’s office claims to have filed 217 criminal cases against cannabis dispensaries or delivery services, naming over 800 defendants. So far, 113 illegal storefronts have been shut down. Normally, that’s the extent of it, but this the first time that a dispensary has been shut down and sued for such an enormous sum. City leaders are hoping the sheer financial burden of this lawsuit will be enough to deter future dispensaries from setting up shop illegally.

The Los Angeles Police Department has also been actively enforcing laws against illegal dispensaries. Following a move by the city council to allow the Department of Water and Power to shut off utilities at unlicensed dispensaries, LAPD officers shut down more than 20 operations throughout the San Fernando Valley.

“We are sharpening our tools and we’re laying the basis to deliver what the voters expect from us … a legal regulated market with appropriate built-in controls,” City Councilman Marqueece Harris-Dawson said.

For more top news stories, make sure to subscribe to our Weekly Newsletter, the top source for all things cannabis-related. 

Have anything to add? Your voice matters! Join the conversation and contribute your insights and ideas below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

About the author

Alexandra Hicks

Managing editor at Cannadelics and U.S based journalist, helping spread the word about the many benefits of using cannabis and psychedelics.