The perseverance of California's illicit market continues. Despite voters legalizing the purchase and consumption of cannabis, state and local law enforcement have yet to fully eliminate the illicit marijuana market. Increased enforcement has definitely made a difference and just yesterday authorities announced that during recent raids, 75% of the vapes confiscated contained vitamin E acetate.
To that point, the California Bureau of Cannabis Control has seized nearly 24 tons of cannabis in 2019. The cannabis seized is valued at nearly $133 million dollars. This is still less than what was seized by the California Highway Patrol who in 2018 confiscated 80 tons of cannabis.
However, this does reflect the growing pains of a fractured legal market. In 2019, it was calculated that illicit market operators made an estimated $8.7 billion in 2019. The forecast was presented by BDS Analytics and Arcview Market Research who projected the legal market made an estimated $3.1 billion.
President of the United Cannabis Business Association Jerred Kiloh stated that the illicit market is perhaps the single most pressing issue facing the state’s legal industry. However, is it realistic to expect the end of the illicit market anytime soon. The war on drugs and particularly cannabis has been an utter failure.
Lori Ajax, the chief of the Bureau of Cannabis Control, explained that, “The prevalence of dirty and dangerous vape pens at unlicensed cannabis stores demonstrate how important it is for consumers to purchase cannabis goods from licensed retailers, which are required to sell products that meet state testing and labeling standards.”
Unlicensed shops continue to pop up providing access to untested, but untaxed products. While some like Kiloh believe this is a major public health issue, one has to wonder how a flat tax of 3% would not help subdue the illicit market by allowing legal vendors the opportunity for growth.
Instead, California’s interest is in increasing law enforcement. In 2018 and 2019, the Bureau’s focus was on getting businesses licensed. Since every jurisdiction was not on board, California left the matter of whether or not to sell cannabis up to the cities and counties who created their own ordinances.
The difficulty of these ordinances led to major licensing issues, with a tremendous backlog leading to a possible cannabis ‘extinction’. An estimated 10,000 cannabis growers were caught up in this fiasco for so long they almost missed their chance to gain their licenses.
It is true that illicit cannabis retailers took advantage of Southern California’s messy legal situation in an attempt to dupe people into thinking they were maintaining compliance. Furthermore, the backlog and licensing issues will take the state of California years to correct. A lot of good could be done in the short term if counties lifted their bans on cannabis operations.
Contributed by Richard Sanchez