LA Deputy District Attorney Says Cali’s Illicit Cannabis Is the “Worst of Any State That Has Legalized
Cannabis regulators in California know that the most challenging aspect of the legal cannabis market is the existence of a massive unlicensed market. Between long-time illegal growers and pop-up shops distributing unregulated cannabis products, it’s hard to compete as a legal operation.
Cali’s voters passed Proposition 64 in 2016 to legalize adult-use recreational cannabis. However, unlicensed cannabis operators have been problematic in California for decades.
The illicit market problem in California is a serious problem. Kenneth Meyer, deputy district attorney for Los Angeles County, commented on the cannabis market’s split. He explained that there’s a $3.1 billion legal market dwarfed by an $8.7 billion illicit market. The state has lost around $2.6 billion in revenue as a result.
“California’s numbers are the worst of any state that has legalized cannabis,” Meyer explained. He highlighted how the high volume of illegal activity also can increase the prevalence of money laundering operations.
Enforcement efforts in LA are having a difficult time handling the unregulated, hazardous cannabis facilities responsible for processing flower into other products.
“We have not seen a decrease in lab cases since the passage of Prop 64,” Meyer said. “We have seen, actually, an increase of sophistication and scale. So what we are seeing is worse injuries, and more deaths, as a result.”
Another discussion in this topic, called “Civil Litigation and Criminal Issues in the Cannabis Industry,” was moderated by Joshua Mandell, a partner at Ackerman, LLP and co-founder and chair of the Los Angeles County Bar Association’s cannabis section.
Megan McClurg, deputy city attorney for the City of Chula Vista explained the situation after explaining her role as a regulator in the cannabis sector.
“I’m assisting with the shut down of illegal operators and also with the regulation of licensed businesses, which is an undertaking. They rent from a landlord, pop up overnight, and operate until we’re able to shut them down,” McClurg explained.
High traffic and “notoriously openly bright green flashing lights and lines out the door” depict these illicit shops. But, generally speaking, they have building issues, such as unpermitted electrical work, magnetic locks, and boarded up windows.
Regulators have found 1,200 unlicensed cannabis grows in homes, sometimes thousands of plants. This resulted in a change in ordinance to attach a $500 fine per plant. But this still isn’t enough to keep the illicit market under control.