Issues Related to Illicit Marijuana Trade in Legalized California

For many decades before recreational marijuana was legalized in California, people were buying marijuana illegally. This included literally buying it on the street in open air drug markets as they are called by the Los Angeles Police Department, and they were also buying on what is often dubbed the marijuana gray market. Now that marijuana is legal for adults to purchase it for recreational purposes, it would seem people would no longer have to buy it illegally.

The problem is that people are able to get high quality cannabis products on the gray market, and will not be charged with possession of marijuana under state law for having it, and if they want to purchase it legally, they may be forced to pay much higher prices.  This is not to say there is no risk to those selling marijuana illegally as they can be arrested and charged with various criminal offenses, but there is not much risk to the consumers. 

When Canada legalized marijuana for recreational use recently, the government said it would only place minimal taxes on cannabis products in an attempt to drive illegal sellers of marijuana out of business since it consumers could get higher quality products from legal vendors and comparable prices.

However, as our Riverside cannabis attorneys can explain, California officials did not choose to go this route as they saw it is a revenue generating industry with respect to taxes, so it may actually be cheaper to buy cannabis on the street than it is to go a licensed dispensary.  This means the only way to effectively rid our area of those selling illegal marijuana is through a law enforcement crackdown. According to a recent news article from the Los Angeles Times, this has led to a dispute over who is going to pay to for this increased enforcement efforts, and this has led to problems on the state level.

To combat the illicit sale of marijuana, the governor had requested a provision in a state budget proposal for $14 million in funding for this efforts. However, the state lawmakers and the governor of California did not agree as to how this proposal should be funded, and it was left out of the proposed budget, meaning there will be no money allocated for additional enforcement efforts.

This initiative was sought by the governor in response to complaints from those in the legalized marijuana industry who are saying they cannot compete on price with illegal sellers who are not paying taxes, regulatory fees, or have the many other costs associated with running a legal recreational marijuana business. There is also a plan to create five specialized teams at the state attorney’s office to fight the illicit sale of marijuana in California, which is still on the floor and up for a vote in the near future, but without the funding allocated in the event the measure passes, it is hard to see how work could begin on this serious issue.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 949-375-4734.

Additional Resources:

Budget dispute hinders state crackdown on illicit marijuana market in California, June 11, 2018, By Patrick McGreevy, Los Angeles Times

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