Police in Costa Mesa, California, were ordered by a court to return drugs worth $800,000 wholesale to a legal marijuana manufacturer.
The Costa Mesa Police Department had accused the owners of the Se7enleaf dispensary of illegal operations and seized the product in September 2023, according to Bay Area news site SFGate.com.
The seized narcotics included more than 128 pounds of marijuana as well as 24 boxes of marijuana oil cartridges and 124 boxes of vaporizers, according to the Los Angeles Times. The products were returned on March 21.
Se7enleaf owner Michael Moussali told SFGate that the seized product, some of it now unfit for sale, was worth $800,000 wholesale and could have fetched between $1.5 million and $2 million at retail.
Se7enleaf’s imbroglio with Costa Mesa began after city representatives saw what they claimed were unpermitted operations at a Se7enleaf facility.
The purported offenses, the Times reported, included delivery bags with the “High Seas” branding on them as well as items and software the city representatives thought indicated direct delivery to customers which is not permitted.
The majority stake in High Seas is collectively owned by Mr. Moussali and his Se7enleaf co-founder Matteo Tabib.
Weeks after that inspection, according to the Times, an undercover cop ordered from High Seas through a delivery app and received his purchase from an employee in Se7enleaf livery driving a car licensed to Expando Products, a legal third-party cannabis-delivery app, the Times.
Mr. Moussali said in turn that he and others wanted to do market research ahead of High Seas’ official opening in April. They put the dispensary’s brand online on the Expando app, and then sent out Se7enleaf’s product for delivery with High Seas branded marketing material.
Se7enleaf has licensing to distribute to both dispensaries and apps.
“Not one piece of product was outside of Metrc, the state’s tracking system. Not one piece of product was unaccounted for. Not one piece of product didn’t have taxes on it paid to the city, and not one piece of product was delivered to anyone under 21 years of age,” Mr. Moussali told the Times.
In February, the case was settled, with Mr. Moussali paying the legal costs for the case in exchange for the return of the product, according to SFGate.
Now, he hopes to recoup the revenue lost due to the whole fracas.
“They essentially wrecked my business with what they’ve done. I’ve lost customers. I’m in a situation now where I may not be able to stay in one of my two facilities, because there’s a lot of financial burdens that need to be addressed. … I’m trying to right this ship as best as possible and save the business millions of dollars in damages and delays,” Mr. Moussali told the New York Post.