Nature of Proceedings: Demurrer; Motion to Strike

Russell and Susan Lugli, on behalf of themselves as individuals and as trustees of the Lugli Family Trust (together, “plaintiffs”), allege as follows[1]: Plaintiffs own two parcels of property known as Wellsprings Ranch, located in Buellton. The property consists of 400 acres of cultivable land, is located in a remote location, and is a secure area for cannabis cultivation. Defendants Francine Shulman and Emerald Sky Agricultural Acquisition, LLC wanted to buy the property and develop to grow cannabis. In July 2017, plaintiffs entered a Purchase and Sale Agreement (PSA) for $7.5 million dollars. Escrow was to close on January 15, 2018. Shulman wanted to occupy the property prior to close of escrow, so the parties entered into a lease agreement from July 15, 2017 through January 15, 2018.

In 2014, Ms. Shulman purchased property from plaintiffs. She leased that parcel to defendant Todd Kaplan (“Kaplan”), for purposes of cultivating cann