California Judge Tentatively Holds Property Owner Liable Over Unlicensed Marijuana Dispensary
- The California judge tentatively ruled that the property owner VRPO LLC can be held liable under nuisance and local laws for hosting an unlicensed marijuana dispensary at 1228 East Compton Boulevard.
- The unlicensed dispensary, The Gas Station, operated from May 2022 to July 2023 without state or municipal licenses, during which the city issued violations, cease-and-desist orders, and citations.
- The court found VRPO acted unreasonably by allowing the dispensary to operate after becoming aware, collecting rent during that period, and failing to promptly serve a notice to quit or evict the tenant.
- The judge rejected liability under California Business and Professions Code Section 26038 because the city failed to prove that VRPO had actual knowledge of the marijuana-related activity when leasing the property, leaving that state-law claim unresolved.
A California judge has tentatively ruled that the owner of a property used for an unlicensed marijuana dispensary can be held liable under nuisance and local laws, while rejecting the City of Compton’s attempt to establish liability under a separate state marijuana enforcement provision.
In a [tentative ruling issued September 17](https://decisiondepot.legal/cases/311090), the Los Angeles County Superior Court granted in part Compton’s motion for summary adjudication against VRPO LLC, which owns a property at 1228 East Compton Boulevard where an unlicensed dispensary known as The Gas Station operated.
Court records state that the dispensary operated at the property from May 1, 2022 through July 26, 2023 without a state or municipal marijuana business license or a certificate of occupancy.
The city issued notices of violation beginning in June 2022, followed by a cease-and-desist order and more than 20 administrative citations through July 2023.
According to the ruling, VRPO knew or should have known about the unlicensed operation but did not serve its tenant with a three-day notice to quit until December 2022 and did not file an eviction action until April 2023.
During part of that period, the company continued collecting rent. The court said VRPO received at least $35,000 from May through November 2022.
The judge tentatively sided with Compton on four claims, including narcotics abatement, public nuisance and two violations of the Compton Municipal Code.
Under one of those provisions, property owners are prohibited from renting or leasing property to businesses engaged in commercial marijuana activity or allowing such activity to operate on property they own or control.
The court concluded that the undisputed evidence showed VRPO either consented to the operation of the unlicensed dispensary or failed to exercise reasonable care to stop it after becoming aware of the activity.
“Given the undisputed facts, the only rational conclusion is that VRPO acted unreasonably,” the court said.
However, the judge rejected Compton’s request for summary adjudication under California Business and Professions Code Section 26038, which establishes civil penalties involving unlicensed commercial marijuana activity.
That provision requires a higher showing for property owners, including evidence that they had actual knowledge that a property was being made available for unlicensed commercial marijuana activity.
The court found that Compton had not established that VRPO originally leased the property for that purpose or had actual knowledge of its tenant’s intended marijuana-related use when the lease was entered.
The lease itself stated that the property was to be used only for activities acceptable to the city and state and requiring any necessary business licenses.
As a result, the court found that a factual dispute remains regarding the state-law claim.
The ruling remains tentative. If adopted as the court’s final decision, Compton would be directed to prepare and file a proposed judgment consistent with the ruling.
The case is *City of Compton v. Ernesto Devera, et al.*, Los Angeles County Superior Court case number 23CMCV00861.