LA takes aim at landlord in lawsuit over unlicensed pot shop

Law enforcement officials around the city are now targeting landlords as the number of unlicensed pot shops grows

LA County Counsel Mary Wickham and 8108 S. Central Avenue
LA County Counsel Mary Wickham and 8108 S. Central Avenue

Los Angeles has been struggling to rein in the growing number of unlicensed cannabis retailers that dot the city, and has increasingly turned its attention to landlords who rent properties to the illegal dispensaries.

Now, the Office of L.A. County Counsel Mary Wickham is suing a South L.A. property owner for allegedly renting to an unlicensed pot retailer. The state of California is also a plaintiff in the suit, filed last month in L.A. County Superior Court.

The suit comes as pressure mounts on city officials to address the growing problem surrounding illegal cannabis retailers. There are an estimated 220 unlicensed dispensaries in the city, around 40 more than the number of licensed shops.

The legal action follows the L.A. County Sheriff’s Department’s raid on the retailer, Central’s Finest Wellness Center, at 8108 S. Central Avenue. According to the suit, L.A. County had charged the property with four code violations, along with state business and cannabis law violations.

The lawsuit names the landlord, Lomita Realty, and its owner, Sevak Esagholian as defendants. Also defendants are the retailer, Central’s Finest Wellness Center, and Asya Torosyan.

Lomita Realty and Esagholian could not be reached for comment. Esagholian purchased the property for $400,000 last year, shortly before the first raid, and signed it over to Lomita Realty a month later.

Torosyan could not be reached.

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The state claims that it raided Central’s Finest in October, seizing $15,000 in cash and over 100 pounds of pot, edibles, and other cannabis products.

A month later, the business was allegedly operating again. The state sent a cease and desist letter to Lomita Realty and Central’s Finest in late April. A day after the letter was sent, a man was shot as he left the 8108 South Central address, although the circumstances are unclear. The shop remains open, according to dispensary mapper Weedmaps.

The L.A. County Counsel wants to shutter the business — a small retail space totaling 1,500 square feet.

Recreational marijuana, now the law in California, has created a multibillion-dollar industry, with an enormous need for land, financing, and properly developed facilities.

Investors willing to take the inherent risks of working in an industry that the federal government still doesn’t recognize are reaping big profits. Still, the industry continues to struggle to compete with the well-established black market, including unlicensed dispensaries.

The city has the authority to punish landlords who rent to illegal shops, but it lacks the necessary resources to enforce its laws. In January, city Department of Cannabis Regulation Executive Director Cat Packer said she was pushing L.A. to take action against landlords.

City Attorney Mike Feuer has also started to pursue real estate agents who arrange leases for illegal pot shops. A pair of brokers from DAUM Commercial Real Estate were named in a lawsuit filed in April over a different illegal dispensary, also on South Central Avenue.

But marijuana industry advocates continue to push for more. Last week, an industry group called Southern California Coalition sent a letter to the city urging officials to raid and shutter illegal shops.