black market cannabis crackdown in california
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Black Market Cannabis: How Hard Should Officers Crack Down?

Some counties seeking DEA help, as California prepares for a legalized marketplace

A thriving black market for cannabis would imperil the newly legalized framework. Officials from around the state aren’t sure how to crack down—and whether or not they should be asking the feds for help.

When Southern California Congressmember Ted Lieu (D-Torrance) introduced an amendment earlier this year to slash funds to the Drug Enforcement Administration (DEA) devoted to cannabis eradication, he had Colorado in mind more than California.

Lieu, a frequent and outspoken critic of President Donald Trump, offered his budget amendment to address “a pretty idiotic scenario” in Colorado, says Lieu’s chief of staff, Marc Cevasco.

“You have taxpayers who are paying to fund two sides of a battle over marijuana,” says Cevasco. The legalization-leader state of Colorado is angling to reap a pot-tax bonanza even as the federal government has set out to kill the very plant that would contribute to state tax coffers.

Trump, Cevasco says, has ceded the question of a cannabis crackdown to Attorney General Jeff Sessions, adding that Sessions “has been kind of militant about it. And it seems like it’s getting worse and not better.”

The enforcement-agencies-at-odds dynamic plays out in California, too, highlighting an irony in the post-Proposition 64 era of a state where pot politics and eradication priorities are decidedly in flux. Some counties in California have continued to accept DEA eradication monies, but now that same cash is helping support the California push toward legalization—even as the DEA is committed to holding up a federal ban on medical and recreational cannabis.

Prop 64 legalized recreational use of cannabis in California last November, and it’s gearing up for full implementation in the new year with a newly regulated marketplace.

But in order for that regulated market to thrive, law enforcement will need to eradicate—or at least substantially trim back—black market cannabis. And generally speaking, the price of legal cannabis can’t be higher than that on the black market, for the simple reason that people will buy cheaper weed where they can.

Although Santa Cruz County has not been taking federal anti-cannabis money or working with the feds on eradication, many other California counties do.

Recently, the DEA was a lead agency in a series of Sacramento raids that yielded 7,500 illegal plants, plus some weapons, as reported by the Sacramento Bee. And officials from a variety of federal agencies helped with major busts over the summer in the counties of Mendocino, Lassen and Calaveras. Additionally, the Santa Clara County Sheriff’s Office receives cannabis eradication funds from the DEA and, until recent years, the Sonoma County Sheriff’s Office did too.

So this all begs the question: Is the DEA’s presence in California actually helping the state clear out its illegal grows to make way for legalization?

“It’s a fair point, an interesting development,” says Cevasco, with a laugh. “In an ideal scenario, we’d all be rowing in the same direction. If the DEA is actually assisting the state of California to set up a legal marketplace, [Lieu] would approve of that. In a weird, ironic way, this is kind of divine justice.”

Lieu’s amendment sought to extract $16 million in cannabis eradication funds, says Cevasco, out of a Department of Justice (DOJ) budget that comes in at around $300 million annually.

While Lieu’s effort was essentially a symbolic exercise in futility—given the DOJ’s discretion in how it spends its budget—a similar amendment from him passed the House in 2015 with backing from liberal Democrats and right-leaning, self-identified “strict constitutionalists” and even support from Paul Ryan, (R-Wisconsin). It’s “a strange alliance,” Cevasco says, that has yielded some nonbinding victories for pro-cannabis constituents.

Cevasco says that in the best available light, the effort may build some momentum for next year’s budget fight—which will take place after California has launched full-throttle into legal cannabis.

Locally, Sgt. Chris Clark says deputies from the Santa Cruz County Sheriff’s Office are keeping in step with a larger statewide trend of cannabis enforcement, and it will take a balanced approach, he says, for “the legalization of marijuana to function properly.”

State lawmakers, such as Senator Mike McGuire (D-Healdsburg), who’s supported the thrust of Prop 64, have pushed for an end to illegal grows. McGuire has many such grows in his Northern California district, which includes the so-called “Emerald Triangle” of Mendocino, Humboldt and Trinity counties. The illicit grows pop up on occasion along the banks of creeks that support endangered species, most notably coho and steelhead salmon.

Santa Cruz County is knee-deep in similar environmental issues, with an environmental impact report (EIR) on cannabis cultivation currently underway. Cannabis advocates say that if the county’s Board of Supervisors doesn’t take the right approach, overly cumbersome regulations will send growers into the same black market that sheriff’s deputies have been trying to uproot. Comments on the draft EIR were due last month. A more permissive regulatory option outlined in the document would allow for grows in areas like Bonny Doon near the coast, where they might otherwise be prohibited.

With 2018 quickly approaching, the marketplace has begun taking shape. The Board of Supervisors began paving the way for legal cannabis sales last week, when it became one of the only counties in California to approve draft regulations letting county dispensaries sell recreational herb in the new year.

But no matter how thoughtful the new rules, there will likely still be those who will skirt the law to avoid getting into the regulatory weeds. For better or for worse, cannabis attorney Trevor Luxon says, some growers will decide that they don’t have the means to create a legal business, and try to do things their own way instead.

“There are thousands of people in the Santa Cruz Mountains that have relied on cannabis for income for years—their entire lives, in some cases—and that’s not going to go away,” Luxon says. “A lot of them are not in the position to jump into the legal marijuana market, because it’s going to cost a lot to set up a legal marijuana business.”

Additional reporting by Georgia Johnson.

 

2 Comments

2 Comments

  1. Theryl

    November 10, 2017 at 7:46 am

    The state tax on trim will be $44 per lb. The Santa Cruz County Cannabis tax on gross sales is 7%. A lb of trim has a market value of $50 per lb. LOL you do the math.
    Cultivators will pay $156 state tax per lb of flowers and $70 per lb Santa Cruz County Cannabis Tax. Then the same flowers that were already taxed at the wholesale level will be taxed AGAIN at the dispensary at 15% for state cannabis tax AND 7% for the Santa Cruz County Cannabis tax AND 9% sales tax. Lol!!!!!

    • Theryl

      November 10, 2017 at 7:49 am

      I’m no economist, but I would guess that these taxes are THE BEST way to get rid of the black market. LOL!!!!

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