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.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law.
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Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
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