The illicit marijuana market is still thriving in California. A recent audit conducted by the United Cannabis Business Association in California showed that the number of illicit marijuana businesses is approximately 3,000. In June, Griffen Thorne wrote a post on the several ways the state can fight the thriving black market, which is a problem for the state economy as well as a threat to people’s health.
However, the state did not initially acknowledge the suggested methods of fighting the illegal market since, recently, the state announced a tax increase on marijuana products, which in turn raised the cost of legal marijuana and thus forcing consumers to turn to the illicit market where marijuana is cheap. But, now, the state seems to be adopting the marijuana policies used by other states such as regulating its marijuana market and improving its enforcement efforts.
Last month, search warrants were served on 24 unlawful businesses, and the Bureau of Cannabis Control, working in collaboration with Los Angeles officials, raided the said businesses and seized marijuana buds and marijuana products worth about $8.8 million. They also impounded 9,885 illegal vape pens and $128,742 in cash. Previously, the bureau had issued landlords whose buildings were being used by illegal marijuana businesses in the state with notice letters notifying them that they could be subject to criminal and civil liability. Previously, the BCC randomly raided and closed such companies, and the action of raiding and seizing products is a significant improvement in their enforcement protocols.
Apart from BCC, other agencies such as the Department of Food and Agriculture (CDFA) in California have also upped their enforcement activities. For instance, on December 13, CDFA, through California’s Attorney General, sued several persons and entities who, according to CDFA, had cultivated and processed marijuana without permits. According to the lawsuit, the lawbreakers are liable for maximum civil penalties of about $10,000 license fee per violation, which is three times the amount of CDFA’s license fees.
The risk of being charged with marijuana law violations in California isn’t something to joke about. Under California law, marijuana agencies are authorized to seek fines of up to $30,000 per day/per violation of any unlawful marijuana activity. Now that the government is taking action by fighting against the black market, people operating illicit marijuana businesses are at high risk because the penalties could quickly get to millions of dollars due to the number of days it takes to grow and harvest the crop. Stanislaus County announced that people growing marijuana illegally would be subjected to a fine of $1,000 per plant per day.
This enforcement trend is likely to spread to other states grappling with the same problem. For instance, Washington has a mature and well regulated adult-use marijuana market and marijuana lawyers in the state say that the regulatory agency shifted from focusing on compliance to full-on enforcement such that the lawmakers had to force the agency to turn their attention back to compliance through legislation.
Many experts are of the view that the illicit marijuana market cannot be eliminated through enforcement because you will always find people who are willing to take on the risk and ignore the law. Even during the years, marijuana was prohibited in the U.S., there were still people ready to grow, process, and sell marijuana irrespective of the risks. However, if the government wants to eradicate the black market, they must lower the taxes, introduce fewer regulations, and expand access to marijuana, such as more dispensaries and cultivation licenses so that more legal players are within reach of consumers.
It would be interesting to hear what specific measures marijuana industy actors like Marijuana Company of America Inc. (OTCQB: MCOA) and Hemptown USA recommend for dealing a decisive blow against marijuana black market operators.
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