S
an Francisco's City Attorney David Chiu has filed a lawsuit against warehouse owner David Chi-Yu Lai and his company P.A.A. Property, alleging they allowed tenants to grow 6,000 marijuana plants without a license at two Bayview warehouses. The city claims Lai was aware of the operations and profited from leasing the properties for the illegal cannabis venture. Chiu argues that this undermines lawful operators who have invested in playing by the rules, flooding the market with cheaper pot and depriving them of tax revenue.

    The lawsuit is not a criminal complaint, but rather demands that Lai and other defendants cease their activities and pay penalties totaling $167,500. Surveillance images showed Lai entering one of the grow facilities, and he admitted to knowing about his tenants' illegal activity. California legalized recreational cannabis in 2016, requiring operators in San Francisco to have a state license from the Department of Cannabis Control.

    The investigation at P.A.A.'s properties last year resulted in the seizure of over 5,800 cannabis plants and nearly 300 pounds of cannabis shake. Chiu noted that the grow houses posed significant safety risks to the residential Bayview community, with code violations including exposed wires, loose CO2 tanks, and missing sensors that could have led to an explosion or fire.