James Kim’s Los Angeles-based cannabis company grew from a scrappy startup in 2017 to a legal unicorn worth $1.5 billion. Allegations of black-market activity and lawsuits be damned—Stiiizy aims to be the Nike of cannabis.

Inside a warehouse in Downtown Los Angeles, next to a strip club, James Kim, the CEO and cofounder of the California-based cannabis brand Stiiizy opens the door to one of his grow rooms, revealing 97…