How the campaign to legalize retail cannabis in the South Bay turned into a ‘knife fight’ – Daily News
Political efforts to legalize retail cannabis dispensaries in four South Bay beach cities have devolved into what one consultant referred to as a “knock-down, drag-out knife fight” mired by personal attacks, infighting and a bitter recall attempt on a city councilman.
At the center of the controversy is Elliot Lewis, the CEO of Catalyst Cannabis Co., a self-described “scrapper” who isn’t shy about his propensity to respond with verbal punches when challenged. His detractors blame his antagonistic style — which includes posting expletive-filled take-downs on Instagram — for the resulting fierce opposition from local officials. And they say his brash personality has prompted early supporters to distance themselves from the initiatives now.
One of the petitions, presented in El Segundo, crumbled, in part, due to the infighting.
Lewis acknowledges his personality likely played a role in the escalations, saying he maybe uses a few too many “f-bombs,” but says that’s just who he is.
“I really think we’re the good guys getting improperly labeled as the bad guys because of our style,” Lewis said.
He alleges “bad intel” led his side to believe their cannabis initiatives would be welcomed by the elected officials in El Segundo, Hermosa Beach, Manhattan Beach and Redondo Beach. It was a tried-and-true formula that had worked elsewhere, and voters in the beach cities were strong supporters of Proposition 64, the 2016 measure to legalize cannabis in California.
In the best case, a favorable City Council — or at least one that sees the writing on the wall — can chose to adopt a certified initiative once it is presented instead of sending the issue to voters. That’s what happened in El Monte when Lewis and Catalyst filed a voter initiative there. Despite similar accusations of bullying, Lewis and his allies ended up nabbing a sizable chunk of the licenses as well, including one later awarded by a judge due to errors in the selection process.
“Our goal is not to go to the ballot, or if we’re going to go to the ballot, for it not to be contentious,” Lewis said.
If that strategy worked, it would have saved the proponents a lot of time and money; they’ve independently spent nearly $1 million combined on the initiatives and recall, according to campaign filings.
But contentious might be an understatement to describe the fight now. Each of the beach cities targeted by Catalyst has either filed its own ballot measure — including one to continue an outright ban in Manhattan Beach — or introduced separate ordinances to regulate cannabis in the hopes of appeasing voters.
Redondo took the additional step of placing the cannabis initiative and a recall of one of its councilmen funded by Catalyst on a special Oct. 19 ballot, a move that has drawn allegations that officials are intentionally trying to limit the number and type of voters who will show up. The other three cities will go before voters in November, including a city-backed initiative filed in opposition in El Segundo.
How the fighting began
The efforts to bring recreational cannabis dispensaries to the South Bay began at least three years ago. Adam Spiker, a consultant from the firm Spiker Rendon, said his company had someone else lined up to fund the push in 2019 before it fell through. Later, Spiker and Richard Montgomery, a Manhattan Beach councilman, met with South Bay officials throughout 2021 to gauge how initiatives might be received, the two men said in separate interviews.
Catalyst was asked to join a collaboration that included High Times and Dub Brothers once the timing “felt right” to make a pitch, according to Spiker. The group was kept small to avoid disputes over the limited number of licenses available in each city. Their targets originally included Hawthorne and Torrance as well.
High Times later left the group, but Spiker said he could not disclose why.
Catalyst has dispensaries throughout California and has been the driving force behind similar initiatives in a dozen cities, including seven different initiatives slated to appear on ballots this election season alone.
Once an ally of Catalyst, Spiker now calls working with the Catalyst CEO one of his “biggest regrets.”
“When all of the heat and all of the eyes got put on Elliot, he doubled and tripled down on his ‘Weed for the People’ persona and these derogatory videos,” Spiker said.
Spiker’s aunt, Sandra Spiker, filed and later retracted the Catalyst-led initiative in El Segundo. Spiker said she moved out of state and was no longer eligible to serve as the petitioner. His aunt and other family members weren’t happy with the publicity surrounding the topic either, he said.
“They didn’t want to be involved and it created a lot of consternation in our family,” said Spiker, who denies asking her to back out.
Despite his trepidation, Spiker believes in the policy behind the Catalyst-backed initiatives, which he described as following the industry’s best practices.
“If they vote to turn this down, in my opinion, it’ll be the complete byproduct of Elliot and not the policy,” he said.
The proponents refer to the start of the war and their first appearance at a November 2021 City Council meeting in Redondo Beach as the “Red Wedding” — a reference to a “Game of Thrones” episode involving a shockingly bloody betrayal.
“We rode in expecting ticker tape and didn’t get it,” said Barry Walker, co-founder of Dub Brothers and Tradecraft Farms, the other company bankrolling the effort alongside Catalyst. “I would say that’s where it went south.”
In hindsight, Walker regrets how personal the battle has become, though he said he doesn’t regret his partnership with Catalyst or his involvement with the initiatives. Both sides could have handled the disputes better, he said.
“We’ve done this before, there’s been smoke and there’s been explosions,” Walker said. “It’s not always easy in the beginning, but once it’s all done, and the licensing process is over and we start to create revenue, we’re everybody’s best friend.”
Lewis places the blame for the misplaced expectations on Spiker.
Spiker helped Catalyst land the appearance before the council and claims he warned the company to expect resistance based on the discussions at Redondo’s prior meeting. Still, he said, no one could have predicted the snowball effect that eventually poisoned the efforts in the neighboring cities as well.
The two sides parted ways afterward, though each says he severed the arrangement.
The Red Wedding
A recording of the Redondo Beach Council meeting suggests attorney Damian Martin, the author of the four initiatives and a frequent partner of Lewis, wasn’t expecting a political firing squad. Martin offered to walk council members through each of the initiatives’ components and answer any questions. Instead, he was given a 15-minute time limit — half of what he said he needed — and faced immediate accusations that the company’s signature collectors were misleading residents.
The council members, who unanimously scoffed at the initiative, referenced inflammatory videos posted by Lewis and Catalyst’s history of filing lawsuits against cities that refused to give it a cannabis license.
“We are really trying to come in peace with this and I hope you treat it sincerely, as that is the goal,” Martin said at one point.
“I’ve also seen videos of your partner and he doesn’t seem to come in peace with any jurisdiction that does not agree with you 100%,” responded Councilman Christian Horvath.
Martin became obviously more frustrated as the meeting went on and his sometimes abrasive attempts to try to regain control only drew more fire.
“It’s not going well, is it?” asked Councilman Todd Loewenstein.
Both sides saw the meeting as an ambush. Council members alleged they were blindsided by the filings and questioned why no one consulted them beforehand.
“We relied on a third party to do that, we should know better by now,” Lewis said in an interview. “There really wasn’t sufficient engagement, I’ll take full responsibility for that.”
Offers to meet after the fact went nowhere and everyone retreated to their respective corners, according to Lewis.
Attacks focused on councilman
Lewis made the next attack by targeting Redondo Beach Councilman Zein Obagi. A mailer sent out around Christmas last year superimposed Obagi’s face onto “The Grinch” and brought up allegations filed against him by the State Bar Association.
In one recent Instagram post, Lewis, tattooed and shirtless, referred to Obagi as a “douchey monotone idiot.” Another accused him of doing the bidding of special interests in South Redondo and likened it to felatio.
“Obagi ain’t the first guy to get a taste of some free speech,” Lewis said in an interview.
Obagi now faces a recall attempt funded entirely by Lewis’ companies. Campaign filings showed South Cord Holdings LLC, the parent company of Catalyst, has spent $356,000 so far on the recall effort.
Obagi, a newcomer who won his seat by just 33 votes roughly a year earlier, strongly opposed the initiatives during the “Red Wedding” meeting in November, accusing Martin of tailoring the scoring system to favor Catalyst and adding language to allow anyone to sue to obtain a license if the city denies its application.
Lewis doesn’t deny the initiatives give Catalyst some advantages, but there’s no guarantee, he said. He acknowledges Catalyst likely benefits from knowing which properties qualified for retail shops in advance and from a requirement for high labor standards, he said.
“I’d be a moron if I spent a bunch of money on the initiative and didn’t build in a few things that are advantageous for us,” he said.
All of the provisions, including one indemnifying the cities from any lawsuits challenging licensing decisions, are still good for the local agencies and for workers, he added. The L.A. County Democratic Party supports all three of Catalyst’s initiatives.
Obagi, an attorney, previously successfully sued Lewis on behalf of a former tenant and believes Lewis is bitter about it.
“He wants to demonstrate to every city where he goes that you do not stand up to Catalyst when they come to your town,” Obagi said. “I think that’s the main message he’s trying to achieve here — that he can recall any council member that he chooses.”
Lewis is upfront that he initially went after Obagi to punch back for how the meeting played out, but after the “Grinch” mailer was sent out, others expressed their dissatisfaction with the new councilman and Lewis saw an opportunity to take down someone he described as a “hypocrite.”
Will it ripple to other cities?
Spiker, the former consultant on the initiatives, believes others cities will hesitate to work with Lewis in the future because of his reputation.
“He’s got to overspend to get his way in communities now, because his persona is spreading,” Spiker said. “I don’t think there’s a world where cities want to be put in a position to work with someone that can immediately turn against them and put out Instagram videos about them.”
Lewis isn’t concerned. If anything, he said, city officials will know to take him seriously.
“At the end of the day, I have no problem saying fear is a good motivator in politics,” he said.
If the initiatives pass in the beach cities and Catalyst lands a license, Lewis said he’ll make peace “with anybody that we can make peace with.”
“If we grab a license or two in the South Bay, we’re going to be up,” Lewis said. “And I’m very confident when the history books close, we’re going to be on the right side of history.”