Hours after dispensary owner talked to LAist, state seizes over $10,000 in back taxes from his legal cannabis business

Madison Shockley dialed in to LAist's radio show AirTalk as a guest on Wednesday morning to describe how state and local taxes are driving legal cannabis businesses like his into debt. Later that day, state police seized money from ATMs and cash registers at his dispensary, Cadre, in South Central.

Officers from the California Highway Patrol (CHP) and the California Department of Tax and Fee Administration (CDTFA) seized more than $10,000 from the location, according to a warrant and seizure receipt Shockley shared with LAist.

Shockley was a guest on the radio program after talking to LAist for a story published that morning. He was quoted in that story talking about fees charged to legal cannabis businesses by the City of L.A.

Shockley doesn’t dispute that he owes unpaid taxes to the city and state. At the same time, he says he has “ major concerns about retaliation” for filing lawsuits and speaking publicly about what he considers a failure by the city and state cannabis departments to provide promised support.

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What we know about the seizure

ATMs sit mangled in The Cadre cannabis dispensary in South Central L.A. following CHP officers executing a warrant to seized $10,000 in tax money.

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Jordan Rynning

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LAist

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Shockley said officers entered the dispensary around 7 p.m. on Wednesday and confiscated any money they could find on the property. They asked his employees to open cash registers and his safe, he said, before they went on to destroy two ATMs to take the cash from them.

Video footage Shockley shared with LAist shows CHP officers prying open two ATMs with a crowbar and power tools.

According to documents state officers provided to Shockley, a warrant for collection targeting Shockley’s business was signed by the agency on June 27, 2024. This was more than a year before state police officers entered his dispensary this week.

Ryan Townsend, a spokesperson for the CDTFA, told LAist in an emailed response to questions that these warrants usually authorize “a specific number of til taps,” or property seizures. He said “the warrants are valid until all of those til taps are executed or until we close a case.”

Townsend told LAist that “CDTFA coordinates with CHP on the date that a warrant will be executed.”

Sgt. Dan Keene, a spokesperson for CHP’s Southern Division, told LAist that while he couldn’t provide information on this specific case, CHP provides law enforcement support for CDTFA’s collection operations.

When a business is found by CDTFA to be delinquent on taxes and a collection warrant is signed, Keene said, “the CHP will go in and collect any money on the property for taxes.”

“Anything seized for the search warrant is taken on behalf of the court,” Keene said, and the court system determines what happens to that property.

In an emailed statement sent after this story was published, the L.A. Department of Cannabis Regulation said they were not involved in the seizure at Shockley's store.

"DCR was not aware this was happening, and didn't find out until we read your story," DCR spokesperson Jen Marroquin said. She added that the agencies involved in the seizure "have nothing to do with the City of Los Angeles or the Department of Cannabis Regulation."

About the timing

When asked whether Shockley’s appearance on AirTalk and a story on LAist.com had any influence on the timing of the operation, Keene said decisions on when to conduct this type of property seizure are made in advance and “are not spur of the moment decisions.”

“There’s no way everything would have moved that fast,” Keene said.

Still, Shockley says his concerns about retaliation from both the state and the city’s cannabis department predates his decision to speak out on Wednesday.

“ I feel like they're already retaliating against us by trying to charge us late fees or exorbitant fees or just throw as many hurdles as as they can to drain us some money so we could go out of business,” Shockley told LAist.

David Hafner from the California Department of Cannabis Control, which enforces businesses’ compliance with cannabis regulations, told LAist the department was not involved in the operation.

What’s next for Shockley

As described in our previous story, Shockley filed a lawsuit against the city claiming the Department of Cannabis Regulation is requiring him to pay more than $15,000 in fees for a licensing process he says he never applied for and is unnecessary.

He said the additional fees would put him out of business.

When Shockley appeared in court July 25, Judge Theresa M. Traber considered issuing a temporary restraining order against the city. Deputy city attorney Patrick Hagan said the city would agree to put the fees on hold until further hearings could be held.

Now Shockley says he is preparing to expand his lawsuit. He told LAist he also plans to request a restraining order against the state to prevent any more collections from struggling businesses like his that were licensed through the city’s Social Equity Program.

The Social Equity Program was meant to provide a pathway into the legal cannabis industry for people who had prior criminal convictions for cannabis-related crimes or lived in communities that were over-policed during the War on Drugs. Many business owners in the program have told LAist that they feel it has not lived up to its promise.

Shockley said he was “barely scraping by” before the seizure and that operations like the one on Wednesday also drive down his business.

He says the seizure has left him uncertain how he will cover his employees’ payroll.

“ I have to hope to make enough money throughout the day to keep up with at least my payroll,” Shockley told LAist, “I'm gonna be late on my rent for sure this month. I hope to barely be able to pay my security on time tomorrow.”