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L.A. sues unlicensed pot dispensary, alleging it sold pesticide-tainted marijuana

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L.A. sues unlicensed pot dispensary, alleging it sold pesticide-tainted marijuana

An unlicensed South L.A. cannabis dispensary was selling products sprayed with a dangerous pesticide, according to a lawsuit announced Wednesday that is part of a broad crackdown on illegal marijuana sales in Los Angeles.

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The dispensary, Kush Club 20, was selling cannabis sprayed with paclobutrazol, a fungicide frequently used on golf turf that is classified as a Type II toxic chemical by the U.S. Environmental Protection Agency, the lawsuit filed Monday by the Los Angeles city attorney’s office said

Advertisement “Illegal cannabis businesses can pose serious threats to the public’s health and safety,” City Atty. Mike Feuer said in a statement. “Customers patronize illegal shops at their peril, and undermine businesses who play by the rules — and whose product is tested to protect buyers’ health.”

In addition to shutting down the business, the suit seeks a civil penalty of $20,000 for each day that illegal activity occurred at the property in the 5500 block of Central Avenue in South L.A. Defendants named in the lawsuit include High Spirits Enterprises, LLC; its “organizer,” James Smith; Kush Club 20; Amy Sahadi Diaz; and Michael Lerner, who is described as the CEO of the limited liability corporation tied to the property. Those named as defendants could not immediately be reached for comment

Only 181 dispensaries have temporary city approval to sell marijuana in Los Angeles, according to the Department of Cannabis Regulation. But hundreds of illegal dispensaries have popped up across the city as an attractive option for those looking to buy marijuana while skirting the state’s 15% tax on legal marijuana sales. Regulators, however, have warned that those shops might traffic in unsafe wares or counterfeit versions of popular marijuana brands and cultivators

In the last year, the city attorney’s office said it has filed 217 criminal cases involving illegal marijuana dispensaries or delivery services, naming more than 800 defendants. At least 113 illegal storefronts have been closed, officials said

The decision to seek the civil penalties from Kush Club 20 appears to mark the first attempt to reach into an illegal vendor’s pocket. During a contentious discussion on marijuana enforcement at last week’s City Council meeting, several council members expressed frustration with what they saw as inadequate prosecution of unlicensed cannabis dispensaries

California’s cannabis marketplace is a mess. Here’s how to fix it By Eric Spitz Mar 15, 2019 | 3:05 AM Asst. City. Atty. David Michaelson said seeking monetary penalties against those charged with operating an illegal dispensary is often “time intensive.” Winning a judgment and the targets’ ability to pay the fine is also uncertain, he said. Michaelson said last week that the city had not sought to recoup civil penalties against any of the more than 800 defendants it had brought illegal marijuana cases against in the last year

Los Angeles Police Department officials said they had also cracked down on illegal dispensaries recently. After the City Council passed an ordinance last month that allows the Department of Water & Power to shut off utilities at unlicensed dispensaries, detectives moved to shut down more than 20 locations in the San Fernando Valley, said LAPD Det. Vito Ceccia of the Gang and Narcotics Enforcement Bureau

Similar actions are expected in South L.A. later this month, he said during the council meeting

High Spirits Enterprises was incorporated on April 4, just four days before the city attorney alleges Kush Club 20 began its illegal operation, according to filings with the California Secretary of State. State records show that another limited liability corporation linked to the address, 5527 S. Central, LLC., was formed in December 2016

Times staff writer Emily Alpert Reyes contributed to this report.

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