Long Beach Offers Collective Punishment

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

Although Morris readily admits he was involved in no less than six different collectives, because his name wasn't listed as a managing member of any of them, it didn't violate the city's ordinance, according to Mais. "To a certain extent, we rely on the honesty of the people we are dealing with," he explains. "As long as their name isn't listed as a management member, we have no way of knowing. You have to assume they are following the rules."

On Sept. 20, 2010, the city of Long Beach held a lottery to determine which of the several dozen marijuana collectives that had paid the roughly $15,000 upfront application fee would be eligible to receive a permit allowing them to operate in the city. It was a fiasco. The city had spent several thousand dollars on a machine designed to randomly choose Ping-Pong balls stenciled with a combination of numbers and letters, each pertaining to a different collective, but the balls were too big, so officials had to toss them into a recycling bin and hand-select them.

Not surprisingly, the carnival-type atmosphere led to immediate claims that the lottery was rigged, recalls Mais, who takes responsibility for the process. "The people who won the lottery thought it was fair, and the people who lost it thought it was unfair," he says. "Other than the fact that the lottery machine failed to work, the lottery was as straight up as any lottery that was ever done. We bent over backward to take any sort of unfairness out of it. We spent a ton of money. It was unfortunate it turned out the way it did because it was embarrassing."

Josh Howard
Miguel Vasconcellos
Josh Howard
Long Beach's favorite frenemy, John Morris
Miguel Vasconcellos
Long Beach's favorite frenemy, John Morris

Morris, who didn't attend the event, recalls receiving text messages each time one of his collectives won the lottery; five of the six locations he'd lined up were selected. "Everybody fucking thinks we fixed that thing," he jokes. "If Shannon had his way, he'd have made sure those balls of ours would never come to the top. . . . The vast majority of management people at City Hall, they don't like me, and I don't like them."

As soon as the city held the lottery, however, it revised its marijuana ordinance. The law already required cannabis clubs to be farther than 1,500 feet from a high school and 1,000 feet from any kindergarten, elementary, middle or junior-high school or other dispensary. To these, the city added that no club could be within 1,000 feet of a park or beach. Because Long Beach is on the ocean and full of parks, the list of eligible storefronts shrank considerably.

Thanks to the new buffer zones, numerous clubs that had won the lottery were now ineligible for a city permit after all, including one operated by Morris. Meanwhile, the city kept adding new construction prerequisites—fire alarms, security systems and carbon monoxide monitoring systems—to further whittle the field. Thanks to what amounted to a bait-and-switch maneuver, the city had to set up a refund-application process to collectives that had won the lottery but were subsequently zoned out of contention.

Ultimately, of the five locations tied to Morris that won the lottery, just two ever opened their doors; of those, only one continues to operate. Morris and his investors had to back out of the business because they ran out of money. "We never made a fucking dollar," he says. "My SJK guys, of the $500,000 they outlaid, I don't think they'll get any of that back."

Morris eventually fired Howard and a woman named Nichole West, who says she drew up a business plan for SJK and never received a dime in return. Both Howard [3] and West, who has left Long Beach [4], claim Morris owes them thousands of dollars. After Howard complained to one of SJK's investors, a famous soccer player who seemed sympathetic, one of the group's lawyers sent him a letter, which the Weekly obtained, threatening to sue him and referring to his unspecified allegations as "untrue" and "grossly slanderous."

But if Morris and other collective operators who managed to win the lottery were upset at the city, so were those whose Ping-Pong balls weren't chosen, or who refused to pay, or could not afford the $15,000 fee to play the game. Larry Parks, who owned the 1 A.M. collective, [2] first became suspicious about the city's program weeks earlier, when he paid a $2,000 consulting fee to Morris' attorney, Violas.

"I wanted to get his thoughts about the lottery process and what he thought my chances were," Parks recalls. "He wanted me to hire him for $2,000 a month and told me his clients don't get bothered by the city. He called it 'good lawyering' and said he'd need $5,000 here and $5,000 there to spread around."

Violas claimed to be "good friends" with Erik Sund, Long Beach's business-relations manager and director of the city's medical-marijuana program. "Mr. Violas told me that if I paid him money, he would be able to guarantee acceptance of my patient-cooperative group's application for a Long Beach city permit," Parks later stated in a sworn deposition. "When I asked him how he could do this, he told me . . . my group might have to make monetary contributions to city projects or to city officials."

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