A second civil complaint against unlicensed cannabis stores and landlords was filed in federal civil court last Friday by the Alliance of Legal Cannabis Entities-DC alleging damages to their legal business from the illicit shops. The first was filed last week.
“ALCE” is formed by the legal medical dispensaries Cannabliss, Holistic Wellness Group LLC, and Herbal Alternatives. Cannabliss is currently closed and transitioning locations, but Herbal Alternatives is still open.
The complaint alleges that “the legal licensed market has lost substantial revenues siphoned off by illegal participants,” referring to a potential annual illegal market the size of over $600 million.
The two civil lawsuits against almost 50 defendants come as the entire legal market, even those not involved in the lawsuit struggle to keep the lights on as The Alcohol Beverage and Cannabis Administration and the D.C. government slow roll closures of illegal cannabis businesses.
The lawsuits represent some of the best publicly available background information on who has actually been running and profiting from unlicensed cannabis operations in Washington, D.C.
The suit filed on Friday leads with the well known Hotbox franchises including a location where a robbery left a staff member dead earlier this year. The complaint details vague D.C. permit applications and alleges the landlord failed to do basic due diligence to check if the businesses were operating illegally or not.
ALCE alleges that the products sold by these unlicensed dispensaries were also marketed as “premium, legal products to gain an unfair competitive advantage over licensed dispensaries.”
Advertisement of illegal products on Toker’s Guide and Gentleman Toker is cited as evidence in the suit as well as the stores own advertisement and methods of payment for “gifts.”
The lawsuits are based on the Lanham Act and allege that the unlicensed dispensaries falsely represented or misled customers to believe that their products were legal and D.C. approved to sell.
The lawsuit seeks to award ALCE damages equal to the dispensaries profits for the last three years, and it asks that the property owners be held liable for profiting from “illegal sale and distribution of cannabis.”
The defendants include whole families of property owners, Peter Mallios and his related LLC’s, multiple unlicensed dispensaries looking to transition, Luxury Soil and its related unlicensed dispensaries, Funky Piece, UpNSmoke, Hotbox and others.
There could be additional similar complaints filed against numerous businesses and property owners in the coming weeks.
A full list of defendants:
MALLIOS REALTY, LLC
PETER MALLIOS CHAMPLAIN ASSOCIATES, LLC
501 SCHOOL ASSOCIATES LLP
2318 18th STREET LLC
MALLIOS PROPERTIES LLC
DREAMS 2 LIMITED LIABILITY COMPANY
FARAH JAOHARI
UPNSMOKE IV, LLC
MASTERMINDS 303 LLC t/a UPNSMOKE
HUSSEIN DIB
REACH FOR THE SKY, INC. t/a GEORGETOWN SMOKE SHOP NIOBIUM LLC
THOMAS G. TSIANAKAS & IOANNA STAGIA-TSIANAKAS
AKSOM LLC t/a DISTRICT TOBACCO DISTRICT TOBACCO INC. AHMAD GHOUSE LOYNAB
BENEMAX LLC
CHARLES RUSSELL PROPERTIES LLC
SAFEE LLC t/a VAPE TOWN
FUNKYPIECE GEORGETOWN CORP.
23 BOND – 2801 M STREET OWNER LLC
FUNKYPIECE CO.
STEPHEN MAGED TRUSTEE
MATTHEW BEBAWY
HERSH PALMER LLC
COLUMBIA LIMITED PARTNERSHIP
775 HOLDINGS LLC
ZAGROS PEAK LLC
MULU K. TASEW ) ZEBADER TEREMA
AL AND EM INC. t/a HAVANA SMOKE SHOP
TOP LEVEL LLC
GLASS CITY LLC t/a WASHINGTON DABBERS CLUB
RS HOLDINGS LLC
SAM JEAN-PAUL AMSELLEM TRUSTEE
SIMON MEIR COHEN TRUSTEE
DARRIN EBRON
1665 WISCONSIN AVE LLC
1669 WISCONSIN AVE NW LLC
SOROUSH ZAREI & MEHRNOSH Z. DASTAN
CLEMENZA LLC
HOTBOX DC LLC
EMPIRE SMOKESHOP LLC
DRIP GALLERY LLC )
LUXURY SOIL LLC
DENVER CONLEY T/A CAPITOL DANKS
DC GARDEN HILL LLC
FAT MUNCHIEZ DC LLC
FLAVORS ITALY LLC