The legal cannabis market continues to prosper but hasn’t necessarily defeated the black market. Over the years of legalization, many underground operations have propped up and stunted legitimate businesses’ growth. However, the California government appears to be working relentlessly to combat the black market operators.
Law enforcement confirmed that they confiscated nearly 1 billion dollars in illegal marijuana within the past year. The authorities announced on Thursday, on the heels of the three state cannabis agencies joining forces to form The Department of Cannabis Control. Those agencies are The Department of Consumer Affairs Bureau of Cannabis Control, The Department of Food and Agriculture’s CalCannabis Cultivation Licensing Division, and The Department of Public Health’s Manufactured Cannabis Safety Branch.
According to Nicole Elliott, the California Department of Cannabis Control director, the past 13 months produced massive crackdowns across the state. Elliott explained that the law enforcement team working on behalf of the DCC played a significant role in executing 232 search warrants. Through this, they have seized half a million pounds of illegal cannabis and “eradicated over 1.4 million cannabis plants,” Nicole said.
The DCC’s not only removed illegal, untested products from the California streets, but they’ve also seized over 100 illegal firearms from the criminal enterprises running the black market.
“This effort has removed more than $1 billion worth of potentially harmful and often untested cannabis products from the market and eliminated 120 illegal firearms from the hands of criminal enterprises,” Nicole said, along with the seizure of $2.3 million in cash since last summer.
Ultimately, these massive operations have cut into legal profits for legitimate businesses. Illegal cannabis is a huge issue across California and America as a whole. Legal operators lose money to the underground sellers, who avoid the high taxes that come with opening a registered business in California’s cannabis industry. According to Politico, the illegal market is approaching the $8 billion mark annually, nearly double that of companies peddling compliant cannabis. Since illegal businesses are selling for lower prices, it’s become almost impossible for legal retailers to keep up.
The ongoing rise of the illegal cannabis market has been a massive issue plaguing retailers since the inception of legal cannabis. The launch of the DCC intends to focus on helping further establish the state’s marijuana market.
Nicole said the takedown is just the beginning of more extensive plans to help California-based businesses using compliant cannabis labels prosper against the black market. The DCC isn’t relying solely on arrests and warrants to do the job. Earlier this year, they awarded $20M to a few cities and counties to help increase the number of legal stores in California. Governor Gavin Newsom also revealed plans to help cannabis owners with tax relief. In his budget priorities, he proposed eliminating the cannabis cultivation tax, which currently forces growers to pay $10.08 on every ounce of flower produced before selling their crop.