A judge Friday dismissed all civil claims filed against a real estate company by the City Attorney’s Office in a lawsuit alleging a South Los Angeles commercial cannabis business operated illegally and sold pot found to contain a dangerous pesticide.
Lawyers for Daum Commercial Real Estate had filed a motion arguing the part of the case against their clients should be dismissed because they did not own or operate a cannabis business and were not the owner or lessor of property engaged in a such an enterprise. They maintained their clients served as brokers in the lease of the property and did not lease or rent any property of their own.
Los Angeles Superior Court Judge Robert S. Draper agreed.
The city has “failed to provide any authority establishing that the realtor defendants may be held liable for the act of leasing, as a real estate agent or broker, property that is owned by another person,” Draper wrote.
Michael Nubel, Daum’s president and CEO, said the company feels “vindicated” by the ruling.
“From day one, we thought the city’s lawsuit was wrong and overreaching and we expended significant resources to defend ourselves against it,” Nubel said.
Daum attorney Priya Sopori said Draper reached the correct conclusion.
“We believe the court reached the right decision,” Sopori said. “It’s a significant victory for Daum and the brokerage community in general.”
The civil lawsuit was filed in April 2019 and names Kush Club 20, branding it an illegal commercial cannabis business at 5527 S. Central Ave. The lawsuit alleges the business operates without a proper license for cannabis sales, and that testing initiated by City Attorney Mike Feuer’s office found the presence of paclobutrazol, a plant growth regulator pesticide. The pesticide is banned on cannabis and not registered for use on other food crops in California, although it is used for golf turf management to increase density and color in the grass, the suit states.
Feuer said previously that the lawsuit was believed to be the first civil enforcement action in California alleging cannabis sold by an unpermitted location contained pesticide.
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