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The city of Sacramento has temporarily shut down a large cannabis manufacturing facility, swiftly prompting an explosive council meeting and a lawsuit.
Officials on Oct. 2 ordered the closure of Natura, located on Elder Creek Road near Power Inn Road, citing fire code violations that make the Morrison Creek district buildings unsafe for its 450 employees.
The decision prompted over 40 workers to come to last Tuesday’s City Council meeting. Several were near tears as they begged for the council to overrule the building inspector’s decision so they could pay their rent and feed their families.
“I believe my company is wrongfully under assault,” Michael Hicks, an employee, told the council. “My job and the job of hundreds of others are in jeopardy right now.”
Mayor Darrell Steinberg urged CEO and co-founder Ori Bytton to urgently spend money for construction, citing a Wall Street Journal article that said Bytton had recently listed his Los Angeles home for $38 million.
“I don’t begrudge anybody’s wealth,” Steinberg said. “But I would suggest to you that you hire people to do double, triple, quadruple overtime to get this work done in collaboration with the building inspector and fire inspector and get these folks back to work as quickly as possible and/or pay you employees while this work gets done.”
The comment prompted Bytton to jump from his chair and shout from the audience, causing the council to adjourn the meeting early as dozens of employees filed out disappointed.
A temporary closure could result in the facility closing for good, said Craig Powell, a co-founder of the firm and its senior vice president.
“There are tens of millions of dollars of plant and product that will rot and decay, to the demise of our company,” Powell said.
Lawsuit filed to keep Natura open
The company Thursday sued the city in Sacramento Superior Court claiming the city violated the company’s constitutional rights. It asks for a judge to order the city to let the business stay open.
“Loss of employment resulting from the city’s outrageous misconduct will be devastating to these Natura employees and could potentially render many of them homeless in a city that already has a significant homelessness problem,” the lawsuit stated.
The case was assigned to Judge Christopher J. Kruger, then reassigned to Judge Richard K. Sueyoshi at Natura’s request.
The city is in the process of evaluating the lawsuit, said city spokesman Tim Swanson.
When Natura opened in 2020, the city repeatedly extended the amount of time allowed to complete construction, taking the COVID-19 pandemic into account, according to Tom Pace, the city’s development director, who spoke before the council. The city’s interim chief building official, Bob Latz, in consultation with city Fire Marshal Jason Lee, made the decision to stop granting extensions, Pace said.
Lee said fire suppression and protection equipment was missing in multiple buildings on the campus. He was not specific, but typically that equipment can include sprinkler systems.
Natura is also a cannabis grower, manufacturer and distributor. Naturaofficials say the complex has a 200,000-square-foot facility to grow cannabis, as well as a processing, manufacturing and distribution center, and an “immersive showroom.” Natura manufactures its own cannabis brands and also serves as a contract manufacturer for other companies.
Privately owned Naturadoesn’t disclose financial figures. The cannabis industry generally has been under financial pressure because too much marijuana is grown relative to the demand in California’s legalized marketplace.
Lee at the meeting said that the buildings on the 11½-acre campus could be reopened on a case-by-case basis as violations are corrected. The campus has 22 structures.
The company told city officials in the past that the required work would take at least until the end of December, said Assistant City Manager Leyne Milstein.
“You know we have rent right?” one woman yelled out.
Employees were not working in the facility when a reporter visited Friday. It was unclear whether they were being paid during the shutdown.
In an interview Thursday night, Powell said the company was in negotiations with the city to reopen.
“At this point, the City Attorney’s Office and our legal counsel are engaged in some very productive dialogue,” the company vice president said. “With that said, we look forward to resuming operations and returning 450 people to their employment very, very soon.”
Swanson confirmed the city has been meeting with the company since Tuesday’s meeting.
“The city has been actively meeting with Natura’s leadership this week to assist them in the development of a plan to achieve compliance with the existing building, fire and life-safety code violations and finish the permitting process for the buildings on their campus,” Swanson said in a statement. “Natura has had several years to address these issues and has been granted numerous extensions.
“The city understands the urgency with which Natura would now like to accomplish the required remedies, and we share concerns about how Natura’s employees may be affected. However, ensuring the health and safety of the people working in Natura’s building and the surrounding community remains the city’s top priority.”