Investigators will review affidavits submitted by “legal nonconforming” cannabis cultivators as part of Santa Barbara County’s enforcement strategy, Assistant County Executive Officer Barney Melekian said.
Melekian, a former undersheriff, updated the Board of Supervisors last week on plans to change the focus of the enforcement efforts, which has multiple agencies and millions of dollars behind it.
Most enforcement has been complaint-driven, according to a recent report, but the County Executive Office and other departments plan to specifically investigate operators who have soon-to-expire state licenses, operators who did not pay cannabis taxes, and operators who have not been responsive in the permit application process.
Melekian said the enforcement team plans to look through affidavits “to the degree that we can and verify some of the validity of them.”
“Legal nonconforming” operators are medical marijuana growers who were cultivating in state compliance before January 2016, and the county allowed them to keep growing while they apply for local permits.
That decision has been the source of many complaints about the cannabis program.
There are 199 acres of marijuana currently grown by these “legal nonconforming” operators, who don’t have to follow county rules (like odor control) because they don’t have their permits or business licenses yet.
Some have provisional state licenses that are good through 2021, so they may not be motivated to hurry along their county application, deputy planning director Dan Klemann told the Planning Commission last week.
The County Executive Office apparently did not investigate the “legal nonconforming” affidavits when they were submitted.
Some of the marijuana farms raided by the Cannabis Compliance team had applied for permits and licenses, or had already been approved for them, when they were investigated.
Several of the Santa Barbara County Superior Court cases that came out of cannabis enforcement are based on the allegation of perjury, accusing defendants of lying about their “legal nonconforming” status in the affidavits and therefore not being allowed to grow commercially.
The county wants to protect the legal marijuana industry, but there’s gray area between the legal market and the obviously illegal black market, including all the operations that have lapses in their permits, said longtime local prosecutor Lee Carter, who recently retired from the District Attorney’s Office.
“If a statute is on the books, a law, and someone violates a law, we prosecute it,” he told Noozhawk. “This one, because of the complex web of ordinances and statutes that go into it, it makes it a little more difficult to prove a straight violation.”
Last March, law enforcement officers served a search warrant at a Los Alamos property and found the largest operation they had investigated to date.
It turned out to be three separate operations, and three men were charged with felony perjury and misdemeanor allegations of marijuana cultivation and possession for sale.
One of them reached a civil settlement and the other two were held to answer criminal charges after preliminary hearings in October.
Seamus Ethridge, 38, one of the men facing charges, had current state licenses and a county permit when search warrants were served.
The base criminal allegation in that case, and several others, is perjury — that operators obtained their licenses by fraud, according to Carter.
The affidavits included assurances the growers had been operating a medical marijuana site according to state law since January 2016, or earlier.
The three farms operating on the Chisan Orchids Nursery property, in the 9600 block of Harvest Road just east of Los Alamos, at the time of the search warrants were Alamos Farms, run by property owner Heung Bok Lee’s son, Simon Lee, and longtime Chisan Orchids employee Joe Kim; THC Farms run by Brian Wayne Touey; and Alliance Farms run by Ethridge.
The county approved a land-use entitlement for that property in January, two months earlier, and Kim was the owner and financially responsible person identified on the application, according to the Planning and Development Department.
“The plans for the project identify the following lessees of the greenhouses that are the subject of the application: THC Farms, Alliance Farms Inc., Alomas Farms Inc., and Chisan Orchids Farm,” deputy planning director Dan Klemann said in an email.
During the preliminary hearing for Ethridge’s case, testimony focused on the timeline of the property, and whether there was evidence of him growing there before 2016.
Sheriff’s Detective James Furber said he visited the property to do a security plan check for Kim’s business license application in February 2019. He said Ethridge was on the property at the time and invited him inside his greenhouse to give advice on the camera security system.
A month later, the property was raided.
Lee, the property owner, told detectives through an interpreter that Ethridge started renting part of a greenhouse in March 2017 under the name Eagle’s Nest Farms. The lease was amended for a full greenhouse in May 2017, for $100,000 a month, according to preliminary hearing testimony.
Simon Lee, the co-owner of Alamos Farms, said the orchid nursery was on the brink of bankruptcy and that he and his father were not making any money selling the flowers, which have a five-year cultivation cycle.
They decided to lease greenhouses in 2017, allowing them to cultivate cannabis on the property, according to court documents.
In other testimony, Simon Lee said Ethridge brought seeds to the property several years before the lease agreement and left them to germinate, but never came to get them, and Lee eventually threw them away.
Judge Von Deroian said Ethridge may have been to the property before January 2016 but evidence was not presented to show he was operating there continuously. She held him to answer for the charges of perjury, possession of marijuana for sale and cultivation of marijuana for sale.
In response to a question from Deroian, Carter said he had offered Ethridge the same deal he has made to most defendants in similar cases: if he pleads guilty/no contest to marijuana cultivation or possession for sale, surrenders all state licenses, gets plants out of the ground, and forfeits money seized at the time of the warrant, “then he can get back in line to get an annual license.”
Allison Margolin, one of Ethridge’s attorneys, said if he pleads to those charges, he is ineligible for licensing for three to five years.
He would agree to “something reasonable” that didn’t make him lose his license or the ability to get one in the future, she said.
Some criminal convictions make cannabis business applicants or owners ineligible for cannabis permits, and people who have had a license suspended or revoked cannot get a license for three years, according to state code.
“The main reason we don’t want to take a deal is there’s no evidence he’s guilty of anything,” said Raza Lawrence, another of Ethridge’s attorneys and Margolin’s partner in Margolin & Lawrence, a Beverly Hills firm specializing in cannabis law.
He plans to file a motion to dismiss the case in February.
“It’s all about the affidavit he filled out, a form which is extremely vague and ambiguous,” Lawrence said. “I read the form and don’t think there are any false statements in there.
“This one we think is worth fighting.”
Santa Barbara County has suspended Ethridge’s license — which he appealed — so he can’t currently operate the farm, he added.
When Ethridge spoke at an April Board of Supervisors meeting, soon after the raid, he said he has been cultivating marijuana legally in the county for 15 years.
He and several other people are fighting asset forfeiture actions by the county related to these raids, over marijuana plants, products, equipment and/or money seized or destroyed by law enforcement.
Ethridge has also filed a civil case, but both are on hold until the criminal case is resolved, Lawrence said.
Touey, 56, the THC Farms owner, also owns a Grover Beach dispensary, 805 Beach Breaks, which was raided on the same day as the Los Alamos farms.
He was charged with felony perjury, and misdemeanor marijuana cultivation and possession for sale.
The District Attorney’s Office also filed a civil asset forfeiture case against him and his $32,696.85 that the Sheriff’s Department seized in March.
Carter filed a motion to dismiss the criminal charges in August, “in the interest of justice,” because a civil compromise was reached: Touey forfeited the seized money to the state.
“Touey gave up all his licenses, terminated his grow, gave up the proceeds he got from the grow, and agreed not to grow in Santa Barbara County anymore,” he said.
Kim, 71, had a preliminary hearing last October and was also held to answer charges of felony perjury related to the affidavit of legal nonconforming cannabis cultivation, and misdemeanor marijuana cultivation and possession for sale.
He is being represented by defense attorney Josh Lynn, and has not yet been arraigned on the information.
In a September brief filed in Superior Court, Lynn called Kim “a 70-year-old farmer with an impeccable record.”
He said Kim has 26 provisional licenses from the state and is not associated with THC Farms (Touey’s operation) or Alliance Farms (Ethridge’s operation).
Kim’s name is on the application for the property’s permit application to the county, which was approved.
Civil Court Cases
The District Attorney’s Office has filed commercial cannabis criminal cases and filed civil cases when prosecutors didn’t think they could prove a criminal charge, according to Carter.
Only a handful of cases are active, with most of them ending in plea deals or civil settlements with the criminal charges dismissed, like Touey’s.
In the case of a Cebada Canyon operation, the District Attorney’s Office took the civil route in court from the start.
Robert “Bobby” Steven Fedor has a cannabis operation in the 3100 block of Avena Road in Lompoc, known as Cebada Ventures and Purisima Agriculture on his county permit application, which is being reviewed.
The county filed a complaint for civil penalties and an injunction last February, alleging Fedor grew marijuana without a valid state license and obtained a cultivation license under false pretenses (perjury on the affidavit).
Law enforcement flyovers spotted marijuana growing outdoors and in hoop structures on the property in October 2018, and a 2015 aerial photo of the area showed no cultivation at the site, according to court documents.
A search warrant was served on Oct. 15, 2018, and authorities found 600 juvenile cannabis plants in a climate-controlled room, and 800 more inside hoop structures.
Both of Fedor’s temporary state licenses had expired on Aug. 17, 2018, two months before, and he told authorities he was in the process of applying for an extension.
“Mr. Fedor admitted that his affidavit declaring he was growing medicinal cannabis on the property prior to Jan. 1, 2016, was based solely on his ‘inheriting’ a collective grow from the previous owner of the property,” court documents said.
An agreement was reached last March: he would pay the county $40,000.
— Noozhawk managing editor Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.