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In a white-walled room deep inside a southwest Santa Rosa building once used to manufacture heart stents, 11 specialized machines to extract concentrated cannabis rumbled, hummed and popped in production for California’s largest legal marijuana manufacturing operation.

Five months ago, law enforcement officers hauled away extraction machines and other equipment worth about $3 million from the Circadian Way facility, halting production and forcing the company, CannaCraft, to address a series of code violations. One of its founders, Dennis Hunter, was briefly jailed.

Since then, California and the city of Santa Rosa have begun embracing cannabis manufacturing with new regulations that allow producers of medical marijuana-infused products to operate openly. And state voters legalized recreational use of marijuana, adding to the system of regulations advocates hope will bring marijuana businesses into the mainstream.

CannaCraft this week received a final level of approval from the city of Santa Rosa to run its multimillion-dollar enterprise, making it the first in the city — and among only a handful of companies statewide — to receive local authorization to manufacture marijuana-infused products for medicinal use. The Santa Rosa plant is the largest cannabis extraction and manufacturing facility in the state, said Nate Bradley, executive director of the California Cannabis Industry Association, a Sacramento trade group.

“It’s a sign of how the times have changed when we have local governments in support of manufacturing,” Bradley said. “Santa Rosa is leading the way in the state.”

Operating under the name CannaCraft, the 150-employee organization is a group of companies founded by Hunter, Edward Fussell and others. One company, CBD Guild, handles manufacturing and packaging. Sonoma Lab Works provides testing services, such as tests that detect the presence of pesticides or fungus in cannabis. Critical Solutions builds extraction equipment. CannaCraft is the management, finance and regulatory compliance arm of the organizations.

The Supercritical CO2 Fluid Extraction machines each day produce about 30 to 35 pounds of raw concentrated cannabis, a yellow wax-like substance with a floral odor that when further refined is used to make oils and sprays marketed for a range of medicinal purposes.

On Wednesday, the company brought a group that included several Santa Rosa City Council members, Sonoma County Supervisor Efren Carrillo, and a representative from Assemblyman Jim Woods’ office among others to tour the facility.

“We want to be the company that helps tear down stigmas for cannabis,” Hunter said to the group during a catered lunch in which they announced plans to hire developmentally disabled adults in a special off-site facility that makes packaging for the company but doesn’t handle cannabis products.

The specter of prosecution still hangs over Hunter, a Rohnert Park resident who was arrested July 15 on suspicion of manufacturing a controlled substance, a felony. He was arrested on the morning the company’s facility was raided by a group of officers from Santa Rosa and the U.S. Drug Enforcement Administration.

Law enforcement seized about $5 million worth of property, including the extraction machines, about $500,000 in cash for payroll and another $1.5 million in products, according to company spokesman Nick Caston.

Hunter was released within about 24 hours, and no charges have been filed.

Five months later, the equipment and payroll money is still in police possession. Federal agents seized the cannabis products, according to Santa Rosa Police Lt. Mike Lazzarini.

The production plant reopened in November under a temporary permit from the city. It received final city approval Tuesday.

The fact that city leaders have made new regulations that welcome cannabis manufacturing doesn’t change the scope of the investigation, Lazzarini said. His detectives are still working with the Sonoma County District Attorney’s Office and the U.S. Attorney’s Office in San Francisco on the case.

“That’s exactly what the city wants to instill is that there is a path and a track to take to legitimize,” Lazzarini said. “You can’t pick and choose which laws you want to follow and which ones you don’t, just like any other business.”

Sonoma County Chief Deputy District Attorney Scott Jamar said he has not decided whether to charge Hunter with a crime. He said the investigation found serious safety hazards and prosecutors are considering a range of options, from felony drug charges to environmental crimes and possibly resolving the case in civil court.

“Currently all avenues are being investigated to include civil remedies which include fines, corrective measures,” Jamar said.

Santa Rosa Fire Marshal Scott Moon said the fire department had visited the Circadian Way facility several times before the July police raid and found a slew of “serious” code violations and was “out of compliance with industry standards.” The violations ranged from how the company was storing and disposing of hazardous waste to an outdated fire sprinkler and alarm systems.

“They were in line with any other type of industry that would come into the city, if that industry came into the city to set up shop and proceeded to conduct business without obtaining the proper permits,” Moon said. “A stop work order would be issued and a list of corrective actions given.”

Caston, a company spokesman, said the company has since spent about $20,000 on upgrades within the 35,000-square-foot facility to meet codes.

Hunter’s attorney Chris Andrian said certain state laws and federal court decisions would be major hurdles for prosecutors to cross in a criminal case against his client.

“I don’t think they could convict him,” Andrian said. “Does that mean there wasn’t some code violation, a compliance issue? Those areas are where I’ve been willing to talk to prosecutors about resolving any civil aspects of this.”

At the Circadian Way facility Wednesday, Santa Rosa councilmembers John Sawyer, Julie Combs and Chris Rogers joined the group, which included representatives from local nonprofits like Social Advocates for Youth, which provides housing, counseling and employment services to youth, and Becoming Independent, which serves developmentally disabled adults.

The tour was followed by a symbolic ribbon cutting by Sawyer, who is on the city’s high-profile marijuana policy subcommittee, wielding an oversized pair of scissors. Sawyer later said he has changed his views on marijuana, replacing “fear with reality” when it comes with the prominent role the industry should play in the city.

Sonoma County supervisor Carrillo shook Hunter’s hand.

“Congratulations are in order,” Carrillo said. “It’s a significant investment on your part in a brand new world.”

“We have plenty of things to do, and we’re excited to be a leader,” Hunter said.

You can reach Staff Writer Julie Johnson at 707-521-5220 or julie.johnson@pressdemocrat.com. On Twitter @jjpressdem.

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