Lawsuit: Santa Ana Mayor Has Financial Ties to Pot Shops

Nick Gerda/Voice of OC

Santa Ana Mayor Miguel Pulido at a City Council meeting.

Santa Ana Mayor Miguel Pulido and other city officials have financial ties to certain medical marijuana dispensaries in the city and have been directing police to shut down their competitors, according to a federal lawsuit filed Monday morning.

The suit — filed by attorney Matthew Pappas on behalf of the Sky High Holistic marijuana collective and others — also alleges that unnamed individuals involved in the campaign to pass a voter-approved measure to allow and regulate some shops, known as Measure BB, promised operating licenses to marijuana dispensaries in exchange for $25,000 contributions.

Furthermore, according to the complaint, some time between June and August 2014, Pulido and other unnamed city officials enjoyed “limousine services, expensive dinners and shows, currency and gifts from individuals and entities seeking to establish control over the Santa Ana marijuana market.”

It also alleges that between August 2014 and this month, Pulido received “financial benefits” from a medical marijuana shop in the city and “intervened to warn that collective when [city] action was pending, was observed at the collective and intervened with police officials on behalf of the collective.”

(Click here to see the entire lawsuit)

Pulido and City Attorney Sonia Carvalho did not return calls for comment from Voice of OC. In an interview with the Orange County Register, Pulido said the accusations in the suit were “unequivocally and categorically false.”

Since the passage of Measure BB in November, the city has taken aggressive steps to regulate the booming local pot shop industry. As part of the process, city officials held a lottery in February, with the 20 winners having the right to apply for a city permit to sell medical marijuana.

Pappas’ lawsuit joins several other suits aimed at overturning Measure BB, which is currently barred from implementation under a court-ordered temporary restraining order. Pappas is best known for having successfully fought a court battle against Long Beach and invalidating that city’s pot shop lottery.

He alleges that Santa Ana’s lottery system is “utterly corrupt,” and violated his client’s right to due process.

In addition to allegations that Pulido and city officials received money from a lottery winning dispensary in exchange for favorable treatment, the process was essentially tilted toward wealthier dispensaries, because applicants could purchase an unlimited number of lottery spots so long as each application was submitted under a different entity. The city charged $1,690 per application.

Sky High Collective did not submit an application for the lottery, according to Pappas.

In recent years, dozens of shops were selling marijuana in the city. And since the passage of Measure BB, City Council members approved extra funding for the police and city attorney’s office to shut down marijuana stores deemed to be illegally operating. The suit alleges that the officers have been heavy handed, shutting down water and power, and raiding collectives while wearing masks.

The suit comes just after a massive controversy triggered when Pappas provided video clips to Voice of OC and other media outlets allegedly showing police officers eating food laced with marijuana and seized during a police raid on the Sky High Holistic collective.

That video also shows a policewoman mocking marijuana patient Marla James, an amputee and plaintiff in the suit, saying that she should have kicked the woman in her “fucking nob,” as well as officers knocking down security cameras.

After Pappas filed his lawsuit, he held a press conference at The Westin hotel in Long Beach, where he fielded questions from a throng of TV news reporters.

Reporters expressed some skepticism about Pappas’ allegations, asking what specifically the attorney had as evidence to support his claims regarding Pulido, and other claims that the police had done $100,000 in damage to the Sky High Collective during their raid.

Pappas said Pulido received cash from an unnamed medical marijuana dispensary in the city. But he wouldn’t offer any other specifics about the evidence he might have against Pulido except to say it consisted of witness testimony and documents. He also said he’s provided information about Pulido to the federal government, though he didn’t name the specific agency.

A reporter asked if Pappas was requesting that Orange County District Attorney Tony Rackauckas investigate his allegations regarding the mayor. Pappas said he would “suggest” such an investigation, but also mentioned that the DA’s office has some “issues” with Pulido.

He also referenced the DA’s disqualification from prosecuting the Scott Evans Dekraai mass shooting case after evidence of prosecutorial misconduct came to light.

The “issues” Pappas was likely referring are that Rackauckas has relationships with known Pulido supporters, including the mayor’s criminal defense attorney, and recently cleared Pulido of any criminal wrongdoing in his land swap with a city contractor.

Pulido admitted to six counts of violating state law related to the land swap and paid $13,000 in fines to the state’s political watchdog.

“I believe action needs to come from the federal government on [Pulido’s ties to dispensaries],” Pappas said.

Steve Downing, a retired police officer who attended the press conference with Pappas, also questioned why police officers would go to a state Superior Court in Fullerton to obtain their warrant to search the Sky High Collective.

Downing referred to another video clip that purports to show a police officer joking about the judge who signed the warrant, John Fish, and saying that he and Fish drove to Staples Center in Los Angeles together. They stopped at an ampm store to buy beer and pour into red cups, the officer says.

“Maybe the judge next door wouldn’t have signed the warrant. I don’t know,” Downing said.

This isn’t the first time Pappas has alleged that Pulido has financial ties to the medical marijuana industry. In a letter to Pulido dated April 10, obtained by Voice of OC, Pappas alleged Pulido had financial interests in dispensaries and that his actions to shut down the competition “very likely violate the federal Racketeer Influenced Corrupt Organizations Act (‘RICO’).”

The letter goes on to say: “It all sounds like an attempt by either operators approved in the utterly corrupt lottery process or even city officials to maintain a monopoly on dispensaries in which they have a pecuniary interest or stake.”

Pappas’ allegations, which have been circulating for some time, have come to the attention of Carvalho.

“I understand that you have told several people that you have information indicating that elected officials in the city of Santa Ana have business relationships with one or more medical cannabis dispensaries operating in the city,” Carvalho wrote in an email to Pappas on June 8. “Do you have documents or names of people that can substantiate these allegations? If so, would you feel comfortable sharing this information with me or outside law enforcement agencies?”

Please contact Adam Elmahrek directly at and follow him on Twitter: @adamelmahrek

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  • Matthew S. Pappas

    We need your support to hold the City and the police officers responsible for their criminal actions. Pass this on!!

  • DeepThroat66

    Here are the facts. Pappas was responsible for the defacto ban in Long Beach. He got the Long Beach Ordinance invalidated. The (2) plaintiffs that hired Pappa’s lost in the City’s lottery process. So, instead of shops operating, all are closed.
    Marla and David James have operated Illegal shops in various cities for years! They are the poster kids for Pappa’s. These three mire cities in lawsuits. The outcome? All shops in those cities now CLOSED! BTW..Pappa’s keeps saying Marla is legally blind. She is…without her glasses! (true) She can see just fine with them on!
    Everybody yells “we need access to our medication”. Measure BB in Santa Ana provides for this. Don’t kid yourselves folks, this is about money, plain and simple. The people that hire Pappa’s to file suit are upset because they can’t operate legally in Santa Ana. If the TRO request for a preliminary injunction is granted by the judge tomorrow, there will be a defacto ban, again, as there was in Long Beach. The City will begin to raid and close all shops in Santa Ana. They have the budget to do so.
    That Dr. Idelshon is in the marijuana industry.
    Chou, also named in the Federal suit as a Plaintiff, has been in the marijuana industry for years! He was popped as he was watching the shop he owns gets raided.
    BTW…Pappa’s always, always lists city employees as defendants. I’ll guarantee you that nobody in SA city government were being bribed.

    • Allen Beck

      Really? Deep Throat? If you can’t put your name behind your words then your words have no credibility. If what you say is truth then stand for it!

  • Paul Lucas

    This needs to be referred to the grand jury for investigation.

  • Paul Lucas

    Measure BB must be scrapped and overturned. Start over.

  • Nunya Biznizz

    It’s time to call out WeedMaps and the selective pot shops they are trying to protect in SA. WeedMaps has history with one of the largest pot shops in OC. This was about paying off people and protecting select pot shops so a select few owners can continue to earn millions which medical marijuana was not intended to be.

    The commentary below was posted on a few places. Please read and draw your own conclusions, but personally I think the lottery process was corruption at its finest:

    WeedMaps pushed for Measure BB limiting the number of shops within the city and gave thousands to the city. This was back November 2014 and covered by News Santa Ana. What’s the point of WeedMaps getting involved in this when they are a Yellow Page listing service, not a dispensary. Because they have close friends who have pot shops in SA and spend money on WeedMaps to have their shops listed. I am willing to bet most of the lottery winners use and pay for WeedMaps premium services.

    When the measures initially pass a collective called 420 Fire Department throws a celebration party stating; “We earned it.” Earned what? A winning pot shop lottery ball? My guess is yes.

    That picture link was posted November 6, 2014 on News Santa Ana. A little research reveals that the person who did the celebration post is connected with WeedMaps. They are basically You Tube famous doing pot videos. Justin Hartfield (Tang) is the founder of WeedMaps and Chubbs does videos on You Tube and has pot shops that goes by the names Nuggetry and 420 Fire Department who celebrated the passing of the measures saying they “earned it:”

    A crooked City Council is selectively allowing a few to control and become wealthy off medical marijuana which is wrong. I like the know the date this guy signed the lease on this building he is remolding to be the superstore of marijuana for California. Was is pre- or post-lottery announcement? A 20K square foot dispensary and pot retail shop being built in SA! How can this be allowed? This would be 10-20x larger than the average pot shop.

    Also, the same person is taking and posting pictures on Instagram with Santa Ana City workers! Right in the post, he states; “Went to city hall to get a parking permit and bumped into a NUGGETRY fan/city worker who asked for a pic. LOL @ the security guard snapping the pic for him.”

    I guess Santa Ana city workers get their medical marijuana at Nuggetry too. This really needs to be investigated. Sky High does have a legitimate concern when it came to the lottery and preferential treatment. I am willing to bet many of the 20 allotted slots were already pre given to those in the pockets of the Santa Ana city council members and/or famous (like the rapper from Cypress Hill, B-Real) because of the attention/press it will bring for the city.

    Void the currently lottery and revoke all winning tickets and do it over electronically to ensure fairness! SA has made medical marijuana in regards to trying to get a handle on it a joke.

  • JohnnyBlze

    Santa Ana is the new GOTHAM city.. smh.

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  • KenSanDiego

    So it’s after 5pm. Where is the press conference video?

  • city zen

    I can’t believe they held the conference at the westin. It’s under a labor boycott. Smh

  • Measure BB was the measure that passed because residents did not like seeing the dispensaries popping up on every corner in their city.

    • Paul Lucas

      They should be more upset about the number of alcohol outlets on every corner.

  • jcbl

    Is anyone surprised to read this? This is the same guy who paid a $13,000 fine for a land deal “in which he may have profited”.

  • Kathleen Tahilramani

    Wow, just wow.