S.D.’s legal pot industry menaced by black market

Now that cannabis dispensaries are legal in San Diego and California, they not only share legitimacy with other longer-established businesses, but some of the problems as well.

Like other merchants, many licensed cannabis business owners have been hurt by the economic downturn caused by the coronavirus pandemic.

Compounding that, they face a challenge from a longtime nemesis that other businesses do not: black market marijuana sales.

In theory, legal cannabis was supposed to not only provide a better alternative to illicit dealers, but to drive them out of business.

That didn’t happen. Illegal operations not only continued, they came to dominate the delivery portion of cannabis sales. According to several accounts, the illegitimate delivery services are thriving amid pandemic-generated consumer caution and restrictions on virtually all businesses, including legal dispensaries.

Rather than venture out into the marketplace, the public’s preference for home delivery of virtually any product has grown tremendously. That includes cannabis — legal or not.

The city of San Diego recently moved to help authorized sellers on a number of fronts.

The city has funded a Cannabis Permitting Bureau to crack down on dispensaries and production facilities that repeatedly violate the rules, according to a report by David Garrick of The San Diego UnionTribune.

Significantly, the bureau will shift enforcement to a proactive approach rather than largely following up on complaints — in other words, treating dispensaries much like other businesses.

In addition to going after “bad actors,” the office will centralize permit approvals and renewals, streamlining the process.

Meanwhile, San Diego is considering the state’s first city-sanctioned association for cannabis dispensaries, according to Garrick. The goals of the association are several: promote the industry, coordinate and finance lobbying efforts, assist low-income people getting into the business and fight the black market.

It would be modeled after the city’s tourism district and assess legal dispensaries fees. That would share the financial burden of working on government regulations and legal issues that is now largely shouldered by a relatively small number of dispensaries.

Most of the association’s money would be spent on marketing, advertising and public relations to convince consumers that cannabis from legal businesses is safer and more reliable than the alternative.

The city’s main interest in all of this is simple: Wellregulated businesses put