Long Beach Offers Collective Punishment

How the city's botched marijuana lottery screwed its winners and losers alike

In 2008, amidst the overall economic downturn that began that year, Morris became eager to explore medical marijuana. He'd recently lost a friend to prostate cancer, and he'd seen how well cannabis had treated the pain. In a recent interview at McKenna's On the Bay, where Morris now works as a manager, he recalled being struck by the thought that he was the perfect guy to implement the city's plan to allow dispensaries to operate in the city as a way to welcome much-needed tax revenue.

His pitch to City Hall: work with someone you know, rather than open the door to strangers from out of town who might turn out to be shady characters. "How are we going to make this truly work in Long Beach so it's not gangbangers doing it?" Morris figured. "Let's bring the community into this thing so everyone knows who we are."

Since marijuana collectives aren't allowed to make a profit in California, Morris says, he planned to open at least four different storefronts throughout the city, each affiliated with a nearby charity, including Long Beach Memorial Foundation; the city's skate-park program, run by ex-councilman Mike Donelon; and Long Beach Gay and Lesbian Center, whose director, Ron Sylvester, recalls talking to Morris and being excited about the concept.

Avalon Collective's Valerie Crist
Miguel Vasconcellos
Avalon Collective's Valerie Crist
Katherine Aldrich collective raided by cops
Miguel Vasconcellos
Katherine Aldrich collective raided by cops

"I brought it to our board of directors and got back to John and told him that we'd love to be a beneficiary," Sylvester says. "I kept an eye on what was happening legislatively, and, of course, we're disappointed that it hasn't come to fruition."

When he met with city attorney Shannon about the project, Morris brought his lobbyist, Matt Knabe, whose father, Don Knabe, sits on the Los Angeles County Board of Supervisors. Shannon informed Morris that state law prohibited him from opening multiple stores. "The whole concept was odd to me because state law is very clear that you can't make a profit," Shannon says.

Morris decided that Shannon had no right to tell him what to do. "As we left that meeting, I said, 'Fuck this,'" Morris recalls. "I've got plenty of friends in town who are believers in this stuff, so I went out and talked to 10 or 12 of my buddies."

He formed an investment group called SJK—an acronym using his own first initial, plus those belonging to two of his friends and fellow investors, Stu Ledsam and Kurt Schneider. Then Morris set about finding properties throughout the city where SJK could grow and distribute medical marijuana via six supposedly separate collectives.

Because the city required at least three individuals to be on the permit application paperwork for each collective, Morris gathered 18 people and convinced them to lend their names to the various collectives. He hired a lawyer, Paul Violas, to draw up the articles of corporation and assemble the complex application materials: dozens of pages of personal disclosure forms, rules, regulations and checklists, each requiring the initials of the collective's trio of managing members.

To create a nonprofit called the Fourth Street Collective at 1069 Wardlow St., Morris reached out to Christine Donelon, wife of the former city councilman who ran the skate-park charity Morris hoped to fund. Another was tax accountant Osvaldo Lainez, who handled returns for both Morris and Dee Andrews, a Long Beach councilman. Lainez is also the president of the nonprofit Chicar, which has won tens of thousands of dollars in Port of Long Beach donations, ostensibly for helping to organize the city's annual Martin Luther King Jr. Day parade, which is steered by Andrews.

The six collectives Morris wanted to open hardly represented a monopoly of the clubs that filed applications for permits in early 2010, however. As the city attorney's office realized how many storefronts hoped to open, panic spread. Deputy City Attorney Michael Mais hit upon a plan: hold a lottery to randomly select locations that could then continue the permitting process. According to Mais, the city had successfully used a lottery to allocate flight spots at the tiny Long Beach Airport.

"We wanted to limit the number of dispensaries," Mais recalls. "We had two choices. We could have a lottery, which I thought was very fair, or we could go with whoever turned their application in first, which I don't think anyone could say was fair."

As the early summer 2010 filing deadline loomed for collectives that wished to get into the lottery, Morris and Violas summoned the SJK group together for a meeting at Smooth's. Unfortunately, not everyone could make the meeting or otherwise be found in time. So with their permission, Morris signed their names himself.

So did his employee, Josh Howard, a onetime marijuana-collective owner who worked for Morris. On the day the applications were due, Morris called Howard. "I need you to start signing signatures," Morris told him. "Half of these people are out of town or I can't get ahold of them—one guy's out of the country."

Morris and Howard drove to City Hall, scribbling whatever signatures and initials they could find. They parked outside, and Morris went upstairs with a stack of papers while Howard continued to sign names. The Weekly obtained all the applications from the city via a California Public Records Act request, and Howard pointed out which signatures he'd forged. The illegible wavy lines were easy for him to identify; he pointed out several items that he and Morris forgot to initial.

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