California AG Petitions State Court for Order to Seize Assets From an Unlicensed Cannabis Dispensary

Troutman Pepper

[co-author: Stephanie Kozol]*

California Attorney General (AG) Rob Bonta is asking the Los Angeles County Superior Court to enter a civil forfeiture order allowing the state to collect unpaid taxes and fees from an unlicensed marijuana business by seizing its assets.

According to AG Bonta’s petition, filed August 3 on behalf of the California Department of Tax and Fee Administration (CDTFA), Parker West Coast Inc. and Jennifer Puga are general partners of a business known as Weedmart of Walnut 30 Cap (Weedmart). The petition alleges that Weedmart has been operating as a marijuana dispensary without a CDTFA seller’s permit or without registering with the Department of Cannabis Control or Los Angeles County to conduct retail sales of cannabis products.

AG Bonta’s petition states that CDTFA audited Weedmart for the period of June 10, 2020, through September 30, 2022, and concluded that the business had outstanding California sales and use tax liability totaling nearly $187,000. That liability became final in January. According to the petition, Weedmart’s balance due as of August 1 is more than $210,000, including unpaid taxes, penalties, collection cost recovery fees, and interest.

Acting on a CDTFA warrant, officers of the California Highway Patrol in February attempted to seize cash and cash equivalents held at the Walnut, CA-based business, but were denied entry into the premises.

The petition describes Weedmart as “a cash-based business with no known assets other than its cannabis products and daily cash receipts generated from sales.”

Why It Matters

The petition represents an attempt by the California AG to enforce rules requiring state regulation and taxation of the marijuana industry in California, the largest adult-use cannabis market in the U.S.

*Senior Government Relations Manager

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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