Liquor Store Owners Are Getting Into the Pot Game

The Neighborhood Market Association has emerged in recent years as a powerful lobbying arm of the region’s many convenience and liquor stores. Its representatives have funded political campaigns and its former president, an advocate for Iraqi refugees, earned an invitation to the White House.

Now, some of those same businessmen are carving out a corner of the marijuana marketplace.

A VOSD review of state, county and city records, as well as interviews with vendors and store owners, found that at least 20 people who are members of the NMA or do business with other trade group members have owned or managed properties with dispensaries. Authorities have investigated or hauled 16 of those businessmen into court — some on multiple occasions. All but one of the court cases ended in fines, and others were the target of private disability access complaints.

VOSD also found that three of San Diego’s 13 legal dispensaries have direct connections to NMA leaders. Two of those leaders were punished by San Diego officials for hosting illegal dispensaries on their properties. This has occurred despite threats by authorities to keep black market players out of the legitimate commercial space.

They are not the only business people in San Diego attempting to break into the marijuana game. Since the passage of Proposition 64, which legalized marijuana for adults, professionals of all types have been elbowing one another for space.

But their presence in the industry might not have been so predictable in November 2016. Prop. 64 prohibited alcohol and tobacco sellers from also obtaining a marijuana license. Last summer, however, the California Legislature gutted that provision when it converted the ballot measure into a set of rules.

Despite an attempt by California voters to keep the two retail worlds apart, alcohol and marijuana are colliding in San Diego through the NMA. Today, businesses that sell tobacco and alcohol can’t sell marijuana on the same site — but the people behind those businesses can still get permits to run separate marijuana dispensaries.

In Chula Vista, alcohol sellers have been given an advantage in the marijuana industry. Marijuana business applicants who ran a liquor store — or pharmacy — for at least three years can satisfy the city’s minimum experience requirements. Although some observers scoffed at that provision, city officials argued that both alcohol and marijuana are heavily regulated at multiple levels of government; good behavior in one industry was likely to cross over.

At the same time, Chula Vista gave the police chief the power to reject any applicants who in the past had violated marijuana regulations in any jurisdiction.

Martin Samo, a former El Cajon Chamber of Commerce board member, acknowledged the overlap between the region’s convenience and liquor stores and its marijuana dispensaries. “There aren’t a lot of other people who are merchants and heavy into real estate,” he said. Convenience and liquor store owners check both boxes.

Samo resigned from the NMA executive board in 2013, saying he disagreed with the group’s direction, but he continued to work in other ways with its executive chairman, Amad Attisha, who owns several gas stations and other properties — including two that hosted unlicensed dispensaries.

In 2015, one of those dispensaries, Green Cellar, argued in court that the business had acted responsibly and within the framework of state medical marijuana laws.

“I did the research necessary to find a location and landlord who was willing to lease space for the dispensary,” the dispensary’s founder declared in as sworn statement.

Attisha said he was unaware of his tenant’s true business and, without admitting wrongdoing, wound up settling with the city and paying a $10,000 fine, plus other costs.

Two months later, El Cajon officials received a complaint that a similarly named dispensary, G Cellar, was advertising online, at a new address. The land was owned by AMJ Properties LLC, a real estate management company listing Attisha and Samo as managers in Secretary of State filings.

Again, Attisha denied any knowledge or involvement in the leasing of that property.

Samo said the tenant had misled their broker, promising to open a photography studio. When Samo learned otherwise, he said he immediately called the tenant and offered an ultimatum: “I said I was going to remove electricity and shut the place down and they left within two to three days.”

Business Sense

Many of the NMA-connected business people who’ve been tied to the marijuana industry said they were unwitting participants. For instance, Steven Abbo, who sat on the NMA board between 2011 and 2013, blamed his business partner for not fully vetting a tenant and allowing an unlicensed dispensary to set up. But he noted in their collective defense, “We’re not the only landlords who were put in that situation.”

Authorities dragged Saad Hirmez, who served on the first NMA board in the ‘90s and later as executive chairman, into court in 2015 to explain the unlicensed dispensary on his property. Although he conceded the battle and struck a deal with San Diego, Hirmez forced the tenant to cover his share of the fines by threatening a separate lawsuit.

“I can tell you I got duped,” Hirmez said, “because the dispensary paid our settlement.”

Attorney Quintin Shammam, who has represented several landlords in illegal marijuana dispensary cases, said his clients weren’t checking their sites as often as the city would have liked and that left them vulnerable. His clients would never have entered the illegal marijuana marketplace willingly, he argued, because they need to be on the good side of city regulators long-term. Damaging that relationship, he said, would not be worth “a little extra rent.”

Still, landlords in several instances were sued multiple times and signed, at the edge of each cases, pledges not to rent to illegal dispensaries.

In January 2012, for instance, San Diego waved the fines for Majid and Bahira Kachi, whose family trust owned property used by an illegal dispensary, if they agreed not to let any unlicensed dispensaries do so again in the future. When investigators discovered another unlicensed dispensary on a different site owned by the family trust three years later, the Kachis paid $10,000, plus other costs.

Last year, the Union-Tribune brought two cases to light — in El Cajon and Chula Vista — against Sabri Shamoun, a retired lawyer whose family firm was honored by the NMA in 2016 as retailer of the year and who is related to the NMA’s former president through marriage. In the first case, Shamoun told a reporter, he thought the dispensary had the necessary license to operate legally. Although medical marijuana dispensaries were permitted under state law, El Cajon had no such licensing system. In the second case, Shamoun blamed the tenant for misleading him about the true nature of the business. He agreed to pay fines totaling $22,500, according to a Chula Vista deputy city attorney, after the dispensary had stopped operating.

Marijuana laws can be complicated, and San Diego’s indecisiveness certainly didn’t help the situation. For years, the city sent mixed signals. In 2013, then-Mayor Bob Filner instructed code enforcement officials to stop sending cases to City Attorney Jan Goldsmith. After Filner resigned, Mayor Kevin Faulconer announced a vote on a new medical marijuana ordinance and ordered the referrals to continue. By summer 2014, Goldsmith was cleaning house.

“When our office has been asked to enforce the laws, we have done so,” Goldsmith told the City Council’s public safety committee. He said “inconsistency” was among the biggest impediments to ridding the city of its black market once and for all.

Green Cellar, the dispensary accused of operating illegally on Attisha’s property, argued in 2015 that the city’s “change of politics” was “an improper reason” to shut down dispensaries that were otherwise following state rules for medical marijuana cooperatives.

Most of the marijuana enforcement cases brought against NMA-connected business people in San Diego occurred in 2014 and 2015. But there are more recent examples in other cities.

In La Mesa last year, Laith Shoshani, a liquor store owner, paid a $600 citation for hosting Discount Budz. That dispensary later reopened at the same address, according to city zoning complaint records.

Shoshani was also the target of two Americans with Disabilities Act lawsuits in 2017, as were other NMA members. A disabled man complained that he wanted to buy marijuana from an illegal dispensary but couldn’t get his wheelchair through the door. Several of those cases were dropped after the landlord cut the man a check outside the courtroom.

Another of those disabilities lawsuits was aimed at John Moses, whose Spring Valley property is home to two businesses. One half is occupied by Club 64, an unlicensed dispensary, open 24 hours a day. The other belongs to Bancroft Liquor.

Dana Stevens, an alcohol- and drug-abuse preventionist whose El Cajon-based organization, CASA, offers certified alcohol-server training courses, said she’s fielded about a dozen phone calls as of late by convenience and liquor store owners who want to know if they can sell marijuana products in their shops. Occasionally, she said, an unlicensed dispensary will offer the landlord a significantly higher-than-normal rent and the landlord will take the deal, despite the risks involved.

“They know that the cost of any fine is really just a cost of doing business,” she said.

Moving Into the Legal Industry

The NMA’s future is in question — the result of civil war. A 2015 lawsuit, spearheaded by three convenience and liquor store owners, alleged that the board had improperly paid its president and a Superior Court judge agreed, appointing a receiver to oversee the group’s next election.

Away from the commotion of the lawsuit, several businessmen with ties to the NMA have become players in the legal marijuana marketplace.

Today, San Diego is home to 13 legal medical and recreational marijuana dispensaries, three of which have ties to the NMA — Harbor Collective in Barrio Logan, Goldn Bloom in Stockton and Balboa Avenue Cooperative in Kearny Mesa.

Harbor Collective sits on property owned by Basil Shamoun, a former convenience store owner who paid San Diego a $7,500 fine in 2014 for hosting an unlicensed dispensary on the same location. In 2017, El Cajon officials also investigated a complaint of an unlicensed dispensary on property owned by Shamoun, but determined that dispensary had closed down. Reached by phone to talk about his transition into the legal marketplace, Shamoun referred questions to his lawyer and hung up.

The Balboa Avenue Cooperative is run by Ninus Malan, a restaurant owner with a history of attempting to stop other business owners from getting alcohol permits in San Diego and National City. He also threated to sue El Cajon over its plan to ban single sales of alcohol.

Malan’s name appears on property records and the dispensary’s city permits, but it has the financial backing of Salam Razuki, a gas station and liquor store owner and NMA member.

In 2016, Razuki agreed to purchase the site and partner with an existing medical marijuana cooperative, according to a lawsuit. That cooperative sued Malan and Razuki and others, alleging they’d breached the terms of their joint agreements and improperly took over the business.

Neither Razuki nor Malan returned multiple interview requests. In court documents, both denied the allegations made in the lawsuit, which is ongoing.

That Razuki is not the face of the dispensary may have its roots in another court case. In 2014, San Diego accused Razuki of hosting an unlicensed dispensary on one of his properties. He settled and paid a $10,000 fine without admitting guilt.

Across town, Goldn Bloom also has a financial relationship with Razuki, according to three vendors who requested anonymity for fear of being blacklisted in the industry. Some of the dispensary’s construction permits name Sami Younan, who owns 1st & Ivy Market and who works for a management company that lists the dispensary as its home in Secretary of State filings. Younan did not return multiple requests for interview.

When asked by phone for more information about the dispensary’s relationship with Younan and Razuki, Goldn Bloom manager Munther Kalsho said, “What does it matter to you what their roles are?” and hung up.

Until it changed names a few weeks ago, the dispensary was affiliated with the popular Urbn Leaf in Bay Park through a licensing agreement.

“We helped get the store off the ground,” said Urbn Leaf’s founder, Will Senn, “but decided it was best for both sides to part ways.” He declined to elaborate on what caused the split but confirmed that Razuki was a financial player at Goldn Bloom.

Senn said he isn’t surprised to see that businessmen with convenience and alcohol store experience are transitioning into marijuana, considering that both industries deal in controlled substances. He noted that the overlap goes all the way to the top.

Indeed, the head of the California Bureau of Cannabis Control, Lori Ajax, got her start as an investigator and spent 22 years in the world of liquor regulations. Her previous job? Chief deputy director of the California Department of Alcohol Beverage Control.