California Pot Industry Must do More to Combat Black Market, Report Says

California regulators, marijuana business owners and law enforcement arms must all up their games in fighting the illicit cannabis market, a new report says.

Just last week, the National Cannabis Industry Association (NCIA), the cannabis industry’s largest trade association,  issued a report urging all groups to do more in hopes of addressing the nation’s ongoing vaping health crisis.

The NCIA report looked closely at areas specifically intended to help legal cannabis business owners catch up with, and eventually outpace, illegal marijuana businesses. Those include:

• Relaxing financial burdens weighing heavily on licensed operations — specifically lowering legal cannabis product taxes;
• Applying procedures that better identify counterfeit cannabis products; and
• Removing barriers currently making it difficult for unlicensed cannabis companies to join the legal market.

If you need help legalizing your cannabis business, our Southern California marijuana business lawyers can help.

Aaron Smith, executive director of NCIA, noted that licensed marijuana business owners should increase their efforts to inform lawmakers on the challenges they face in doing business. Especially in states like California, where high taxes and heavy industry regulations force retailers to hike product prices, and essentially encourage consumers to search for lower priced products, which seem to be sold exclusively on the black market.

California’s Marijuana Market Breakout
It’s no secret that California’s marijuana marketplace is heavily lead by unregulated outfits. The report findings confirmed this notion, showing that licensed cannabis businesses are  currently outnumbered by illicit retailers at a rate of 3-to-1.3. This confirmation is especially concerning when looking more closely at the vaping health crisis.

Vaping Health Crisis Background
This past summer, a spate of vape-related illnesses sprang up in hospital emergency rooms across the country. In its most recent data updates, the Center for Disease Control and Prevention (CDC) noted that since the summer, at least 60 deaths and 2,700 hospital admissions have occurred across the United States, due to vaping related illness. Industry experts widely blame illegal marijuana businesses for producing and selling unregulated vaping products containing dangerous ingredients, resulting in negative health outcomes.

Troubling Health Findings
The report also confirmed bootleg vaping products frequently contain dangerous ingredients. Heavy metals, pesticides and vitamin E acetate, often present at dangerously high levels, commonly show up in vaping products sold exclusively by unregulated storefronts.

NCIA Safe Vaping Task Force
Once it became clear last summer that a vaping health epidemic was sweeping the nation, the NCIA Policy Council assembled a Safe Vaping Task Force, and called for guidance on how best to improve the problem. More than 30 industry professionals were consulted and have contributed to this report.

Legal Implications
Findings from the NCIA report are consistent with thoughts shared and actions requested by industry insiders for some time. There is some comfort in that consistency. But at the heart of the issue lies the fact that the legal cannabis industry is still yet to replace the illicit market. And as far as health is concerned, the sooner the illegal market can be quelled and the legal one preferred by consumers, the better cannabis product safety we will see.

While many licensed cannabis business owners have urged law enforcement and law makers to do more to help stamp out bootleg operations, it is still very important that cannabis product manufacturers do their part as well. They can do so by more diligently researching and sourcing safe and reliable materials for their products, and retailers can better educate customers on the product safety offered by regulated sellers.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:
National Cannabis Industry Association
Center for Disease Control and Prevention