California seizes $30 million in black market cannabis from illegal pot shops
SACRAMENTO – California authorities have tripled the number of raids on unlicensed cannabis shops in the last year and seized $30 million in pot products, but legal industry leaders say enforcement is still inadequate to break the dominance of the black market in the state.
In 2018, the first year of licensing, the state Bureau of Cannabis Control worked with local law enforcement to serve six search warrants on unlicensed pot shops and seized some 1,594 pounds of cannabis worth $13.5 million.
During the first six months of this year, the bureau served 19 search warrants on unlicensed sellers, confiscating more than 2,500 pounds of illegal marijuana products with a retail value of $16.5 million, according to data released last week. The state has also seized $219,874 in cash from illegal pot shops.
And to further strengthen enforcement, Gov. Gavin Newsom this month authorized fines of up to $30,000 per day against unlicensed marijuana growers, distributors and sellers.
“We recognize the importance of enforcement for a strong regulated cannabis industry and continue to partner with local jurisdictions to address issues related to unlicensed cannabis businesses,” said Lori Ajax, chief of the state bureau.
But industry officials say there are still thousands of illegal cannabis growers and sellers in California, a black market some predicted would be curbed when California voters approved Proposition 64 in 2016, allowing state-licensed firms to grow and sell marijuana for recreational purposes.
Despite the uptick in enforcement efforts, the number of actions so far “is severely inadequate,” according to the California Cannabis Industry Assn.
There are thousands of unlicensed retailers operating so there should have been at least hundreds of enforcement actions so far, said Lindsay Robinson, executive director of the association, who noted many illegal pot shops are easy to find because they advertise.
“California has always struggled with enforcement of the illicit industry,” Robinson said.
The state had a year to create a new bureau to draft regulations and procedures to license the new cannabis market and state officials have acknowledged problems, including the refusal of most cities to allow cannabis sales, that have led to many fewer licenses than expected. High state and local taxes that add up to 45 percent to the cost of licensed cannabis have also stymied the legal market.
Still, Ajax said, the bureau has done “tremendous” work “in accomplishing our mandate to develop a comprehensive regulatory system under challenging conditions.”
A new audit by the state Department of Finance also concluded that the bureau’s staffing and facilities are “not sustainable to provide effective and comprehensive oversight of cannabis activities throughout California.”
Auditors said a recent check found the bureau’s Enforcement Unit had filled only 15 of its 68 authorized positions. The bureau says it has filled 26 positions so far – still less than half those authorized.
“With the existing number of Enforcement Unit staff and only one field office, the Bureau’s ability to process complaints, perform inspections and investigations, and review and inspect testing laboratories is severely impacted,” the audit said.