Stiiizy’s founder is landlord to black market dispensaries

Dec. 12, 2023 Updated 7:20 AM PT

The sign on the building said Jerry’s Liquor, but inside, Compton code enforcement inspectors found a cannabis dispensary called Fly High 20 Collective.

The discovery of the black market dispensary in 2019 wasn’t unusual in a city plagued with them. But when authorities looked deeper into the property on Rosecrans Avenue, they found something startling: It was owned by Tony Huang, the man behind one of the cannabis industry’s biggest and most successful companies.

After co-founding Stiiizy in 2017, the San Gabriel Valley native and his partners created a vertical enterprise that grows, distributes and sells marijuana legally throughout California. More than just a company, Stiiizy markets itself as a “lifestyle brand” that sells clothing, hosts live events and donates money to social justice causes.

But in a pending abatement suit, Compton’s lawyers claimed Stiiizy’s co-founder “is also known for his serial operations of various illegal cannabis dispensaries.” The city said in the lawsuit it believes that Huang, as the landlord, “controlled the illegal sale of marijuana from the property.”

Huang’s holding companies owned nine properties that municipal, county or state authorities have identified as sites of illegal dispensaries, according to a Times review of property, court and tax records. The documents, as well as interviews with law enforcement officials and dispensary employees, revealed ties between Huang’s properties and a larger web of unlawful cannabis storefronts across the Southland connected through real estate deals, common lenders or shared tenants.

Huang declined to be interviewed. His spokesman, Michael Sitrick, said in a statement that Huang purchased a number of investment properties that tenants used, without his knowledge and in violation of the leases, as illegal dispensaries. He tried his best to evict them, Sitrick said, and when those efforts failed, he sold the properties.

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“Mr. Huang did not know in any instance that an unlicensed or illegal dispensary was operating on his properties when he rented them,” Sitrick said. “Mr. Huang has been trying his best to disentangle himself from any investments connected to the sale of unlawful commercial cannabis.”

Sitrick said Huang wasn’t aware of or involved in illegal cannabis sales at his Compton property and “will work cooperatively with the city of Compton to establish that allegation is false.”

Black market dispensaries have flourished even after California legalized retail cannabis sales in 2018. These illicit operations undercut the legal market by evading taxes and licensing fees, and they ignore the zoning restrictions and product testing requirements enacted to protect the public. Across the state, the all-cash businesses have become the sites of robberies and other crimes, forcing authorities to devote significant resources in often futile efforts to shut them down.

A general view of the atmosphere during the Stiiizy Retail launch event at Hubble Studio in 2019.

The only criminal prosecution against Huang tied to a dispensary was resolved with a sentence of probation. He has settled abatement cases by paying modest fines and without admitting wrongdoing.

No action has been taken against Huang’s eight state licenses to grow and sell marijuana under the Stiiizy brand. David Hafner, a spokesman for the state’s Department of Cannabis Control, said the agency was “currently investigating this situation to determine the appropriate next steps.”

From bud-tender to ‘chief visionary officer’

Huang, 41, grew up in Temple City, a San Gabriel Valley suburb, and graduated in 2006 from UC Irvine with a bachelor’s degree in criminology, law and society.

Huang started out as a cultivator, according to an application he submitted for a cannabis retail license in Pasadena. He grew marijuana in his garage and sold it to a medical dispensary in Marina del Rey, where he eventually took a job as a bud-tender.

In 2014, Huang opened a licensed dispensary of his own in Santa Ana but also found himself charged with several felonies. Los Angeles County prosecutors accused Huang of manufacturing hashish and growing marijuana inside a Rowland Heights property, transporting marijuana for sale, vandalism and committing grand theft against Southern California Edison, according to a criminal complaint.

Huang’s spokesman said the case stemmed from Huang “experimenting” with extracting hash oil. “He tried it once, failed, put everything in a closet and left it there,” Sitrick said.

Huang pleaded no contest to manufacturing hashish and vandalism. Los Angeles County Sheriff’s Department records say he served 15 weeks in jail, but Sitrick said that to his client’s recollection, he spent 10 days in custody and served the rest of his 180-day term under house arrest.

Seeking to get off probation and expunge his conviction two years later, Huang wrote in a letter to the court that he committed his crimes at a time when “my back was against the wall and I saw an easy way out to pay the bills.”

A judge granted Huang’s motion in 2017. That year, he co-founded Stiiizy with a business partner, James Kim. While Kim has courted the media, taking reporters on a tour of a Stiiizy grow site and sharing his story of using cannabis to cope with post-traumatic stress disorder after military service in Iraq, Huang has remained in the background. He has given no public interviews, divulging details of his personal life and business ventures only in licensing applications.

Kim didn’t respond to questions from The Times.

Stiiizy boomed. When Huang and his partners applied in 2020 for a license in the Riverside County city of Wildomar, Stiiizy’s parent company, the Shryne Group, disclosed its six dispensaries were expected to earn $46 million that year. The flagship Stiiizy store in downtown Los Angeles alone was taking in $4.6 million a month.

Now with 31 dispensaries throughout California, Stiiizy presents itself as deeply committed to helping poor neighborhoods “heal from the devastation done by the war on drugs.” The company has issued news releases showing its executives presenting checks to local officials to fund improvements to parks and schools.

Huang’s official title is “chief visionary officer” of the Shryne Group, whose portfolio has gone beyond retail. According to the Wildomar document, it encompasses 17 companies that also grow, process, distribute and deliver cannabis.

When Huang applied for the Pasadena license, the Temple City native wrote that the chance to open a dispensary there represented “a bit of a homecoming for me.” But while his application was pending, Pasadena authorities were investigating an illegal dispensary at a building he owned.

The dispensary had opened in a former dress shop on Green Street. When the city tried to figure out who owned the property, “one LLC led to another LLC which led to another LLC,” Jon Pollard, a code compliance manager, testified before a city commission.

“It’s not criminal in and of itself,” he said, “but it’s indicative of an intent to possibly obscure true ownership of the properties.”

The utilities were paid by another holding company, Pollard testified, but when he dialed the phone number listed on the bill, “I was connected to Tony Huang.”

Huang purchased the property as an investment, his spokesman said. He had no knowledge it would be used as an illegal dispensary when he rented it out, Sitrick added.

Pasadena authorities first cited and fined Huang. His lawyer promised to evict the tenant, but the dispensary stayed open. Pollard told the commission anyone could file an eviction case, but the property owner must take additional steps to kick out the tenant. The outcome, he said, depends on “the tenacity that you push it through the courts.”

Sitrick said after the tenant refused to leave, Huang urged the city to raid his building. Police served a search warrant, seizing cannabis and $1,714 in cash and arresting four people. Eight months later, Pollard sought a warrant to board up the building and confiscate everything inside. Before that could happen, property records show, Huang sold the space to an optometrist.

Pollard testified that Huang’s company had been renting out the building for $10,000 a month, about twice the market rate. The tenant, Amy Sahadi Diaz, was 22.

“Not that you can’t be an enterprising person at 22 years old,” Pollard told the commission. “You can. [But] in my estimation, it’s an amalgamation of individual issues that cause me to consider, precisely what is going on here?”

‘The less questions I asked, the better’

Diaz, Huang’s former tenant, is depicted as a phantom-like figure in court records. Attorneys complain they cannot serve her with court papers. Residents of a Downey home she listed as her address say they know no one by that name but get plenty of her mail. After she stopped coming to court this year, Diaz’s own lawyer said she had lost contact with her, prompting a judge to issue a warrant for her arrest.

Over a 16-month period, Diaz leased at least eight properties in South Los Angeles, Huntington Park, North Hollywood, Compton and San Bernardino that authorities identified as illegal dispensaries, according to a review of eviction cases. The monthly rents for each building ranged from $2,000 to $10,000.

A marijuana dispensary at 1789 Firestone Blvd. in Los Angeles.

One was Holmes Collective, a building on Firestone Boulevard that Diaz leased for $7,000 a month. The owners, an elderly couple, believed they were renting to a licensed marijuana business, said their attorney, Hasti Rahsepar.

“The unfortunate thing is they pay a lot of money,” Rahsepar told The Times. “They pay good money and they pay cash.”

Rahsepar has filed a pending eviction case to push out the dispensary operators from the building, which she said was raided by the Sheriff’s Department most recently in September 2022. She said she did not know of Huang.

Diaz, Rahsepar said, was “simply a proxy, a front.” She wasn’t even sure a woman she deposed in the eviction case was Diaz. The woman refused to show her ID on the advice of her lawyers, who told her to invoke the 5th Amendment, Rahsepar said.

The Times reached Diaz by phone. In several interviews, Diaz, now 27, acknowledged working for illegal dispensaries but denied leasing them. She said she never knew whom she was working for: “I felt like the less questions I asked, the better.”

Most workers “never meet the man behind the curtain,” said Lt. Rich White, who leads cannabis enforcement for the Los Angeles County Sheriff’s Department’s Narcotics Bureau. “The owners can monitor their stores through the surveillance cameras and contact these folks without ever setting foot in the shop.”

Diaz got her first job at a dispensary in Compton at 19, she said. She made what she considered good money — $12 an hour plus tips, tax-free. She and the other bud-tenders, all young women, had the same idea: “This is temporary. Make as much money as you can in a day.”

About three months into the job, Diaz said, her bosses asked the bud-tenders for their personal information, explaining it was part of the process to get a license for the shop. She said she handed over her driver’s license and birth certificate.

After sheriff’s raids shut down the dispensary, she found work at other shops in Compton and downtown Los Angeles.

Asked whether she took money to sign a dispensary lease, Diaz denied it. “I wish that were the case,” she said. “I’d be a few thousand dollars richer.”

In 2018, Diaz said, she got a call from a lawyer, Cristian Peirano, who asked her to come to his office in Orange County. She learned the owner of a building on Central Avenue was suing to evict her. It was the first time, she said, she heard her name had appeared on a lease for a dispensary.

“Someone literally forged my signature and had my ID,” she said.

Peirano, she said, told her they’d make the landlord do a “forceful eviction,” which could take up to a year. At most, she recalled him saying, she was facing “municipal code penalties.” No felonies, no jail time.

When she asked who hired him, Peirano said he “could not disclose that information,” she recalled. “We just represent the shop,” he said, according to Diaz.

Months later, Diaz said, she received an email from an old high school teacher with a link to a Los Angeles Times article. The headline: “In a first, L.A. sues unlicensed cannabis dispensary, seeking millions.”

Then-City Atty. Michael Feuer accused the Central Avenue storefront, called Kush Klub 20, of selling marijuana laced with toxic chemicals sprayed on golf courses. Diaz was named as a defendant.

Diaz recalled Peirano assuring her the case was “a tactic that L.A. uses to intimidate people, to scare people.”

She told him: “OK, well, look. It’s working.”

A representative of the property owner, Ben Spinner, was deposed in the case. He testified that a broker contacted him about leasing the property and sent him Diaz’s information. In the deposition, Spinner recalled the broker saying his clients “owned this big brand called Stiizy [sic], which I heard of, that they had all these licenses, and that they’re — that they’re very legitimate.”

Huang’s spokesman said the broker “was not being truthful if he said Stiiizy was his client.” Neither Huang nor Stiiizy were defendants in the case.

Spinner said he and his client agreed to lease the property to Diaz without running a credit check or verifying her income. The lease called for Diaz to pay $10,000 a month to rent the building, whose stated use was “church and all other legal related issues.” A man whom Spinner believed was Diaz’s boss handed over the rent and security deposit in cash, he said in the deposition.

In their abatement complaint, city lawyers called the lease a “fraudulent” scheme that required a “judgment-proof individual.”

After the city sued, Diaz said, Peirano told her he’d negotiated a resolution: a $20,000 fine that she would not have to pay herself. Records from an eviction case show Peirano’s firm represented her in the eviction proceedings tied to the Central Avenue property, but neither Diaz nor any lawyers acting on her behalf ever responded to the city’s claims.

The city obtained a default judgment against Diaz for $8.8 million.

Diaz said she wasn’t aware of the judgment until a reporter informed her of it. She now wonders about her attorneys: “Were they representing me for real or are they just trying to throw me under the bus?”

Peirano said he wasn’t aware the city secured the $8.8-million judgment against Diaz. Told of her account, Peirano said, “I do everything on the up and up, so I’m not worried about that.” He declined to discuss his representation of Diaz in the previous eviction case or say who paid his fees.

Peirano represented Huang in a “landlord case he had a long time ago” and a misdemeanor criminal case, Sitrick said, but the spokesman denied Huang had any involvement in Kush Klub 20. He said Huang has never paid lawyers to represent employees of illegal dispensaries.

Diaz and Huang say they don’t know each other. She insisted she never signed the lease in Pasadena. Sitrick said Diaz’s “representative” arranged it without Huang ever meeting her.

Diaz also denied knowing the owners of two San Bernardino buildings where authorities say she signed leases for dispensaries. Authorities have filed two tax liens against Diaz — claims against any current or future assets — seeking $792,300 in back taxes, records show.

She is currently on the state’s list of top 500 delinquent taxpayers.

A duffel bag of cash, robberies, and real estate

The afternoon of July 18, 2019, a woman called the Azusa Police Department and said she was being robbed at a dispensary on Arrow Highway. A police dispatcher wrote that a scuffle could be heard in the background: “Sounds like things being thrown around.”

Then the line went quiet.

A month later, a dispensary employee at the same location called the police at 5:30 a.m. and said two security guards had assaulted her, according to a dispatch log. She had been working alone, she said, when one of the guards punched her in the face, slapped her and pointed a gun at her head. They took money and product from the shop along with her phone and purse before trying to lock her inside, she said.

Huang bought the property in March 2018 and sold it three months after the second robbery, property records show. Sitrick said Huang didn’t know his building was being used as a dispensary called Azusa’s Finest until getting a notice from the city. Huang wasn’t aware of the robberies, he said, and sold it after trying and failing to evict the tenant.

State tax authorities began investigating Azusa’s Finest in 2021. After seeing a man leave the shop with a duffel bag, California Highway Patrol officers returned the next day with a warrant. They seized $1,646 and records showing that money was picked up five times the previous day, totaling $32,517, a tax official wrote in an affidavit.

Investigators learned a woman named Reyna Mejia had opened a utilities account at the building five months after Huang bought it, according to a petition to seize Mejia’s assets and property records. Huang’s spokesman said he has “no idea” why Mejia was paying for the utilities.

Mejia, then a 22-year-old Florence-Firestone resident, leased three properties that year in Boyle Heights and South Los Angeles that were used as illegal dispensaries, according to lease agreements and eviction notices.

Tax officials concluded that Azusa’s Finest and three more dispensaries in East and South Los Angeles owed $4.8 million, a debt that accrues $19,826 in interest a month. The state decided that Mejia should foot the bill.

Karen Yiu, a deputy attorney general who wrote the petition to seize Mejia’s assets, declined to comment.

In a brief phone interview, Mejia confirmed she owes the state more than $5 million, “a huge number.” She said she wasn’t comfortable discussing the matter without first speaking to her attorney, Lee Petros. Contacted again, Mejia hung up.

Petros, who did not return messages seeking comment, sued Mejia in 2019 to remove her from a Florence-Firestone building owned by Huang, eviction records show.

Huang’s spokesman said he bought the property on 83rd Street in July 2017 for “investment purposes.” The sheriff’s department twice raided a dispensary there, seizing cannabis and thousands in cash, according to a county abatement complaint.

After Petros evicted Mejia, Huang’s company settled the abatement case by paying a $50,000 fine and promising not to lease to a cannabis business.

Huang sold the building in 2021 to a company called JXTZ Investment Group. Records show the company also acquired two other properties Huang previously owned. Huang’s spokesman denied any connection to the buyer.

Despite the raids, eviction and sale by Huang’s company, the cannabis sales continued on 83rd Street. Deputies executed two search warrants in 2022, seizing cannabis, money and a polymer ghost gun, according to White, the sheriff’s lieutenant.

In July, JXTZ Investment Group sold the property to a Mid-City company that has evicted the same tenant from its buildings in Compton and North Hollywood for using them as illegal dispensaries.

The Times could not find a link between Huang and the Mid-City company — and Sitrick denied any existed.

But a familiar tenant was named in those evictions: Amy Sahadi Diaz.

A ‘small fine’ paid for ‘convenience only’

Between July 2019 and April 2020, the LAPD raided a dispensary called the Green Garden Collective four times.

Huang had bought the building, a former hair salon in the Westmont neighborhood, 25 days before the first raid, according to property and court records. His spokesman said he sold it three months later after learning it was being used as an illegal dispensary, “contrary to what was stated in the lease.”

Sitrick said there is “no relationship” between Huang and the buyer, Philip Oh. Property records do show that Oh also acquired the Azusa’s Finest property from Huang’s company. Oh’s lawyer declined to comment.

After the Los Angeles city attorney’s office charged Huang and Oh with violating the city’s prohibition on unlicensed cannabis sales, Peirano — the lawyer who represented Diaz — helped negotiate a deal for Huang, Sitrick said.

In exchange for a no contest plea to a misdemeanor electrical code violation and a year’s probation, prosecutors dismissed the other charges against Huang. Oh was sentenced to a year of probation and fined $4,100.

Officials from the state Department of Cannabis Control and Los Angeles city attorney’s office didn’t answer questions about whether the criminal case or abatement efforts affected Huang’s licenses. The state cannabis agency’s spokesman provided a link to public disciplinary actions, which showed none have been taken against Huang.

The case does not appear to have affected Huang’s standing within Stiiizy or its parent company. His spokesman said the company’s “senior leadership” knew of the criminal case and abatement actions.

Before publication, a lawyer representing Huang and Stiiizy sent a cease-and-desist letter to The Times claiming the newspaper had been duped into writing a “hit piece” by Stiiizy’s former chief executive. The lawyer, Ekwan Rhow, wrote it was “obvious” the former executive had leaked information, potentially from confidential arbitration proceedings, and warned he would sue The Times for defamation.

The Times never spoke with the former CEO or his attorneys and learned of his apparent falling-out with Stiiizy from Rhow’s letter. After The Times requested an interview with Rhow regarding the claims raised in his letter, a spokesman returned the call and declined to provide additional comment.

In October 2019, Huang sold a Florence Avenue storefront to Oh. The LAPD served nine search warrants at the property between March 2019 and October 2021, seizing cash, cannabis and guns from an illegal dispensary called the Plug 20 Cap, city lawyers wrote in an abatement complaint against Huang.

After purchasing the building in 2017, Huang tried and failed to evict the tenants, who had opened the dispensary without his knowledge, before eventually selling to Oh, Sitrick said.

In their complaint, city lawyers called the sale a “sham.” Huang’s company loaned Oh’s company $440,000 — the amount paid to acquire the building — creating a lien against the property for its full value, the city alleged.

Property records show that Huang’s companies also loaned money to Oh’s entities that acquired the sites of Azusa’s Finest and the Green Garden Collective, securing the loans with liens against the properties for $478,000 and $230,000, respectively.

Huang’s spokesman said the transactions were legitimate. He had trouble finding buyers for the properties, Sitrick said, so he sold them with “owner-carried” loans.

In his letter to The Times, Rhow said Huang sold the Florence Avenue building years before the city “falsely alleged” he was involved in illegal cannabis sales.

Huang and Oh agreed to pay the city a collective $450,000 without admitting wrongdoing to resolve the case. After the city attorney’s office trumpeted the settlement in a news release, a spokesperson for Huang told KTLA-TV Channel 5 that he could have proved at trial he didn’t know about the illegal cannabis sales but chose to pay a “small fine” for “convenience only.”

A dumping ground in Compton, a Stiiizy store in Wilmington

Huang bought the old Jerry’s Liquor building on Rosecrans Avenue in October 2018 through a holding company. Its name: Compton Great Investment.

Code inspectors first cited an illegal dispensary there about a year later, according to inspection reports. The city has charged in an abatement complaint that the Fly High 20 Collective sold cannabis there for years, “illegally, openly and notoriously.”

Sitrick said Huang wasn’t complicit in any illegal cannabis sales at the property and would “work cooperatively” with the city to prove it. David Welch, an attorney representing the city of Compton, declined to comment.

Huang used the property as collateral to borrow $960,000 from a Temple City-based lender, EC Capital-Oswego, property records show. The loan officer who authorized the loans also manages a firm that owns shares in Stiiizy’s parent company, according to company documents filed in court.

Huang borrowed $900,000 from another lender at the same Temple City address, Kao-Lin Capital Funding, securing the loan with a Torrance building, according to property records. In an abatement complaint, county authorities identified the Torrance property as an illegal dispensary called Supreme Remedies.

Kao-Lin Capital Funding also loaned $3.1 million to another of Huang’s companies that owns the site of a licensed Stiiizy dispensary in Pomona.

Huang’s spokesman said he borrowed from the companies to purchase investment properties.

In 2021, Huang sold the Rosecrans Avenue property to a company whose manager controlled another entity that acquired the sites of the Azusa’s Finest and the Plug 20 Cap dispensaries, records show.

Sheriff’s deputies raided Fly High 20 Collective on April 20, 2022. In a back office were three safes, “all of which were open and empty prior to our arrival,” a deputy wrote in a report.

The dispensary has since shut down. Detectives recovered three stolen cars this year from its parking lot, which has also served as a dumping ground, according to search warrant and code enforcement records. The walls are marred with graffiti from a local gang, Compton Tortilla Flats. During an inspection this year, code officers found homeless people squatting inside the building, which had been stripped of its wiring and wood.

But although some buildings previously owned by Huang have been left blighted after their use as illegal dispensaries, others, like a former used car lot in Wilmington, have found a new life with the state’s blessing.

After purchasing the Pacific Coast Highway property in 2018, the owner used it as collateral to borrow $650,000 from EC Capital-Oswego, the same firm that lent money to Huang.

In March 2019, the LAPD searched the building, which was operating as an illegal dispensary called White Castle, according to a prosecutor’s motion. A 30-foot sign with a green cross had been raised outside.

When detectives served a warrant at the property owner’s home, they found mason jars with labels for cannabis products, tote bags printed with marijuana leaves and “Stizy [sic] cannabis products,” the prosecutor wrote in her motion.

A marijuana dispensary at 1026 W. Pacific Coast Highway in Wilmington

Huang’s spokesman said he didn’t know the property owner, who wasn’t affiliated with Stiiizy. Huang had no connection to White Castle, Sitrick added.

Charged with engaging in unlicensed cannabis sales, the owner turned to Petros — the lawyer who handled Huang’s case against Mejia — to remove the tenant from the property, according to eviction records. White Castle finally shut down after the LAPD raided it for the fifth time in eight months.

The green cross has come down. A new sign has gone up outside the building on Pacific Coast Highway, which received a license from the state to sell cannabis legally.

The name?

Stiiizy.

Stiiizy’s founder built an L.A. cannabis empire, while being landlord to illegal dispensaries

From bud-tender to ‘chief visionary officer’

‘The less questions I asked, the better’

A duffel bag of cash, robberies, and real estate

A ‘small fine’ paid for ‘convenience only’

A dumping ground in Compton, a Stiiizy store in Wilmington

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