At a Thursday press conference, Mayor Bob Foster stands in front of photos of some of Jon Storms’ vehicles that were seized Wednesday. Photos by Sarah Bennett.

Just ten days after the scheduled ban on the last remaining medical marijuana dispensaries took effect in Long Beach, police announced the arrest of a Long Beach dispensary owner, who they say has been running the collective illegally as a commercial for-profit enterprise.

Jon Storms, 44, was arrested on Wednesday when the Long Beach Police Department and Drug Enforcement Administration officials served nine search warrants at locations across the state—including one at Storm’s East Long Beach Cliff May Rancho, where he was taken into custody for possession of marijuana and possession of marijuana for sale.

During a Thursday afternoon press conference, officials noted that Storms’ arrest is the result of a year-and-a-half long investigation into his dispensary—Quality Discount Caregivers at 1150 San Antonio Dr.—which they say has been operating without a permit since 2010. The local businessman also owns other Long Beach businesses including two tanning salons, a bikini shop, a limo rental service and, most recently, the El Dorado Restaurant—which has been locked in a battle with the City over its un-renewed entertainment permit since Storms purchased it last month. 

Sources say Storms ran several other local collectives as well—including one on Second Street—but LBPD could only stress that they are following up on leads to several other locations that may be involved. Though Storms was released the same day due to the sheer amount of evidence and paperwork required in such a case, he could also face felony counts of drug dealing and money laundering once he is brought to trial.

“The original purpose of medical marijuana was supposed to be having collectives and dispensaries that are nonprofits dispensing medication to those who need them,” Mayor Bob Foster said at the press conference, “but what the suspicion has been and the concern has been that this is a for profit industry. This is one instance and we are sure that there are others that prove this is clearly not a nonprofit institution.” 

The LBPD is being assisted on the investigation by the Drug Enforcement Administration, the Los Angeles Interagency Metropolitan Police Apprehension Crime Taskforce (LA IMPACT), the state Franchise Tax Board and the Los Angeles County District Attorney’s Office. The collaborative investigation has allowed the Department to evaluate Storm’s assets, many of which, sources say, he paid friends to put in their names.

The warrants were served on Wednesday to Storms’ businesses, residences and warehouses, including five in Long Beach, one in Signal Hill, one in Corona and two in Needles, CA where he owns two riverfront vacation homes.

Police say they seized more than $800,000 in cash, 14 rifles, 17 handguns, three shotguns, body armor, 17 high-end collector cars, one boat, one truck, three personal watercraft, four classic motorcycles, one RV and seven off-road recreational vehicles. They did not serve search warrants at Storms’ other properties, which police say includes six residences in Nevada.

“A pound of marijuna costs the dispensary between $1500 and $3500…[the sales of which] leads to a net profit between $5,500 and $16,600 per pound,” LBPD Chief Jim McDonnell said as he stood beside a chart visually presenting the calculations. “As you can see, there is a tremendous amount of money in this and you can see why so many people are interested in it. You can see why we have involvment by gangs and organized crime in many dispensaries throughout the Southland and that’s why we take this as seriously as we do.”

The City of Long Beach has had an interesting history with medical marijuana collectives the last few years, going from allowing them to regulating them to an eventual ban which was approved by City Council in February. Some collectives were granted exemptions from the ban, but those, too, ran out earlier this month.

“The City of Long Beach attempted to facilitate the spirit of [Prop 215 and S.B. 420],” said McDonnell, “however the result was the creation of storefront dispensaries that are selling medication over the counter for profit. Some dispensaries have abated,  however many have failed to follow the law and continue to reap the rewards of their illegal activity.”

Storms’ collective, police say, was operating illegally since it opened in 2010 despite Storms’ application to operate being denied. It was not shut down until Wednesday when police served a warrant there. During the press conference, law enforcement cited ads for the dispensary—which offered incentives such as free marijuana, free pipes and other discounts for new and returning patients—as proof that the collective was not being run as a nonprofit.  

“We estimate the gross sales from this dispensary to be between one and two million dollars a year in spite of Mr. Storms claiming a very modest annual income,” McDonnell added. “These for-profit dispensaries erode the quality of life in our neighborhood and attract crime…There is an active ban on collectives in the city and we’re going to aggressively go after anybody who just thumbs their noses at it.” 

No word yet on when Storms will be charged or what the official charges will be.