California launches probe of cannabis licensing to ‘clean house’ of corruption
LOS ANGELES — Corruption in California’s cannabis industry has become widespread and brazen.
There have been pay-toplay schemes, including a demand for cash in a brown paper bag for a pot license, threats of violence against local officials, and city council members accepting money from cannabis businesses even as they regulated them.
Those problems and more were uncovered by a sweeping Los Angeles Times investigation last year. Now state officials are launching an audit aimed at curtailing bribery, conflicts of interest and other misdeeds.
The inquiry, requested by Assemblyman Reggie Jonessawyer, D-los Angeles, and authorized Wednesday by the state Joint Legislative Audit Committee, comes more than six years after California voters approved Proposition 64, the ballot measure that legalized recreational cannabis and unleashed a wave of corruption that has afflicted local governments in rural Northern California enclaves and towns like Calexico near the Mexican border.
Other state lawmakers have proposed hearings and reforms following The Times’ “Legal Weed, Broken Promises” investigative series, which also highlighted the failures of public officials to root out the illegal cannabis market and protect the workers toiling and dying on farms.
State auditors plan to identify six jurisdictions with licensed cannabis businesses and review criteria used to approve the permits, reviewing local governments that have been rocked by corruption allegations and others that appear to have fewer such problems.
They’ll be looking for patterns in the licensing rules that indicate whether certain practices are “more susceptible to fraud and abuse,” State Auditor Grant Parks told lawmakers Wednesday. They’ll also be reviewing a “fairly good sample” of cannabis permits to check whether local authorities followed rules they had set, he said.
The findings could form the basis for legislation and new regulations governing licensing, Parks said.
In an interview, Jonessawyer hailed the action as a step toward reform.
“If we don’t clean house, nobody else will. I think this will prove to the public that we take corruption very seriously,” said Jonessawyer, who declared himself the state’s “cannabis cop” after publication of the Times investigations.
Proposition 64 left ultimate business licensing in the hands of cities and counties. Part-time, often low-paid local elected officials became gatekeepers over decisions worth potentially millions of dollars to business owners in the hyper-competitive cannabis market.
The state’s dual state and local licensing system is widely blamed for creating a fertile ground for corruption. The Times investigation uncovered a possible six-figure bribe demand by the former mayor in Baldwin Park — later corroborated by a federal plea agreement — and other potential conflicts of interest around the state.