March and Ash, a dispensary chain in California, is pushing back against the unregulated cannabis market in unincorporated San Diego County with an anti-racketeering, false advertising, and unfair competition lawsuit, the Voice of San Diego reports. The suit is an attempt to punish the illegal cannabis trade in the county where licensed cannabis operators are banned and unlicensed dispensaries have thrived.
Modeling the suit after Federal Racketeer Influenced and Corrupt Organization (RICO) actions, the lawsuit names ex-San Diego County Sheriff’s Captain Marco Garmo—who is serving two years in prison on weapons and corruption charges—and the San Diego Reader, a local media outlet accused of hosting advertising for illegal cannabis dispensaries. The suit also names six other defendants, including ATM operators, landlords, and an unlicensed edibles brand, the report says.
“For people who don’t live here, it’s hard to grasp how out of control this got in Spring Valley and certain areas of El Cajon and Lakeside,” Bret Peace, the general counsel for March and Ash, told the Voice. “There were stores on seemingly every major street with blinking green lights, open 24 hours, with sign spinners and ads in the Reader.”
The former Sheriff’s Captain Garmo recently pleaded guilty to trafficking firearms out of his office and to an array of corruption charges associated with illegal cannabis shops around the county. One case involved Garmo tipping off his cousins to an upcoming enforcement raid, resulting in the dispensary facing no charges.
Attorney Cory Briggs told the Voice that “the purpose of the lawsuit is to put an end to the illegal competition” faced by licensed dispensaries.
“It’s law enforcement’s job to do that, but Marco Garmo had some sort of mob monopoly on the law enforcement and laws weren’t being enforced in his part of the county like they were supposed to be. So, entities like March and Ash are responding to unfair pressures.” — Briggs, via the Voice
Briggs said his team hired their own investigator who used phone records and video surveillance to make their case.
“All of this was out in the open,” he said in the report. “They just got used to operating with impunity.”
In their own effort to push back on the illegal cannabis trade, county officials in January passed a draft ordinance allowing legal cannabis firms to open in unincorporated parts of the county; however, the final draft is not expected until early Fall.
The county is seeking more funding and receivership authority to combat the illegal dispensaries, the report says. According to a recent California State University, San Marcos study, San Diego has shut down 83 unlicensed shops since 2018. These enforcement numbers reflect a 2019 report that estimated the California illegal cannabis market makes up $9 billion of an 11.9 billion industry, putting legal cannabis at a nearly $3 billion deficit.
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