Daum commercial brokerage helped procure space for illegal pot shop, city lawsuit says

The Los Angeles City Attorney’s Office is accusing Daum Commercial Real Estate and a landlord of helping procure a space for an unlicensed cannabis dispensary in South L.A., which the city says sold pesticide-tainted pot.

The lawsuit centers on Kush Club 20, a shop located at 5527 S. Central Avenue. The property owner, registered as 5527 S. Central LLC, and its CEO, Michael Lerner, are also named defendants in the suit.

Daum and two of its brokers — Benjamin R. Spinner and James Vu — are named defendants, accused of leasing the property and “misrepresenting” the business on the lease paperwork.

Daum is based in Downtown and has offices across the L.A. area, and in Phoenix. In January, Daum represented Marcus Adams Properties in a six-property industrial portfolio deal.

Representatives from Daum, along with Spinner and Vu, could not be immediately reached for comment.

The lawsuit seeks an injunction against Kush Club 20 and an eviction of the company from the property. City Attorney Mike Feuer’s office claims that cannabis Kush Club 20 sold contained a pesticide banned for that use.

The state’s legalization of recreational cannabis, which took effect January 2018, also banned any cannabis business without state and local licenses. Feuer has been cracking down on illegal operations. As of September 2018, his office had brought 120 criminal cases against 105 allegedly illegal businesses, according to LAist.

While the legal market in L.A. has exploded, the black market remains strong. The L.A. Police Department estimates there are 300-350 illegal dispensaries operating citywide, or about double the number of licensed shops, according to CBS Los Angeles.

Earlier this year, city Department of Cannabis Regulation Executive Director Cat Packer said the city would specifically hold property owners accountable for allowing illegal operations on their properties.