Corruption in the cannabis industry
Back in 2016, this editorial board endorsed Proposition 64 to legalize marijuana in California on the grounds that prohibition was “a costly, failed experiment that flies in the face of growing demand for the substance.”
In the years since, however, we have not been blind to the problems with how legalization has been implemented.
High taxes and overregulation have helped keep the black market as viable as ever. But it has also opened the door to corruption.
In the last few months, there have been high-profile guilty pleas related to marijuana policy here in Southern California.
On Oct. 7, 2022, former
San Bernardino County Planning Commissioner Gabriel Chavez admitted to his role in a scheme with former Baldwin Park City Councilmember Ricardo Pacheco to solicit bribes from marijuana businesses seeking to operate in Baldwin Park.
On Jan. 13, 2023, Richard Allen Kerr, the former mayor of Adelanto, pleaded guilty to “accepting more than $57,000 in bribes and kickbacks in exchange for approving ordinances authorizing commercial marijuana activity within the city, and ensuring his coschemers obtained city licenses or permits for their commercial marijuana activities,” according to the U.S. Department of Justice.
Just days later, on Jan. 19, Melahat Rafiei, a former Democratic Party official, admitted that she “agreed to give at least $225,000 in bribes to Irvine City Councilmembers in exchange for their introducing and passing a city ordinance that would allow Rafiei’s clients to open a retail cannabis store in Irvine.”
These kinds of corruption opportunities exist because governments have too much power over whether and which businesses get the blessings of the government to operate.
Marijuana should definitely be legal to use and sell in the state of California.
But both state and local governments need to make it much easier for the market to work.
That means slashing taxes and regulations to encourage operators to enter the legal market, and establishing simple rules to allow such businesses to open up.
The more convoluted the barriers or permit schemes, the greater the risk of corruption.