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The black cannabis market in California is at least three times the size of its regulated weed industry, according to an audit released Wednesday, the latest illustration of the state's ongoing struggle to tame a long-standing cannabis economy. legal limbo.
The audit, conducted by the United Cannabis Business Assn., Revealed the presence of approximately 2,835 dispensaries and unlicensed delivery services in California. In comparison, only 873 sellers of cannabis in the state are allowed, according to the Bureau of Cannabis Control.
The figures are the latest sign of California's radical establishment of the legal market, which promised better regulation and better control starting in 2018. Legitimate marijuana companies have repeatedly criticized the leaders of the company. State and police forces for failing to crack down on unauthorized dispensaries and delivery services, which sell cannabis at a much lower price by bypassing state and municipal cannabis taxes.
Earlier this year, an industry-backed financial audit estimated that about $ 8.7 billion would be spent on unregulated cannabis products in California this year, compared to just $ 3.1 billion spent on cannabis sold by legal companies.
Officials also warned that cannabis products sold on the illegal market may pose health risks because edible products, vaping pens and flowers on the shelves of illicit stores have not been subject to State tests. Since June, the California Department of Public Health has linked more than 60 cases of acute lung disease to patients who have recently used anti-vaping pens. He also warned that many of these people had recently purchased products in unlicensed stores.
The UCBA, a professional association representing dispensary owners, growers and other licensed marijuana companies in the state, conducted its audit by browsing the popular and controversial Weedmaps website, which runs as a Yelp-type service for dispensaries and cannabis products.
Lawrence Mansour, head of technology at APOP Media, a UCBA member specializing in cannabis advertising, said he had calculated the estimate of illegal operators by compiling a database listing all lists based in California from a dispensary or a cannabis delivery service on Weedmaps. Mansour said it found 3,757 ads, a number well above the total list of approved cannabis dealers registered in the state.
Any attempt to quantify the number of unlicensed cannabis vendors in the state would be an estimate. The BCC does not track this data, and there are illegal marijuana companies in California that do not advertise on Weedmaps.
UCBA presented the audit findings in a letter to governor Gavin Newsom and the cannabis agency on Wednesday, calling for Weedmaps crackdowns, criticized by many cannabis industry professionals for have expanded the reach of illegal vendors.
"Every day, Weedmaps continues to advertise unlicensed retailers, they put consumers at risk and suppress growth and the very existence of the legal market," the letter says. "Unlicensed operators on Weedmaps do not pay taxes or the costs of complying with local and national regulations, do not respect the protections required of workers or consumers and do not allow unions to organize themselves as workers. which allows them to charge a fraction of the cost. . In simple terms, these retailers, who have easy access to the public via Weedmaps, make profits without contributing to California while endangering the health and safety of the people of our state. "
An employee of the Los Angeles Department of Water and Electricity shut off electricity at an illegal marijuana clinic earlier this year.
(Allen J. Schaben / Los Angeles Times)
The professional association has also asked the state to retroactively impose multi-million dollar fines on Weedmaps in the context of Bill AB 97, passed in July, which provides for $ 30,000 in fines. penalties for each day a cannabis retailer operates without a license. Some have interpreted the law to mean that Weedmaps should also be liable for these fines for allowing unlicensed clinics to advertise without a license.
Alex Traverso, a spokesman for the Bureau of Cannabis Control, said the agency had been striving to fight the state's large illegal market.
"The office would like to license more outlets for cannabis in California," he said. "Unfortunately, there are several factors that prevent us from doing it. Everything is not under our control. With regard to illegal activities, the office will continue its repressive efforts and will continue to ensure the health and well-being of the population. "
Earlier this year, the agency said it had executed 19 search warrants in illegal clinics and seized about $ 16.5 million of unregulated cannabis products in the first six months of the year. The two totals were more than the totality of the enforcement actions taken by the agency in 2018.
The BCC also sent a banning letter to Weedmaps last year, demanding that the website stop working with unlicensed operators. However, Weedmaps has argued in the past that it is protected from such orders under Section 230 of the Communications Decency Act 1996, which protected platforms such as Facebook and YouTube. any responsibility for the content published by their users.
Late last month, however, Weedmaps announced that it would stop allowing unauthorized companies to advertise on its platform.
In a statement released Wednesday, the company said that in addition to the requirement for new advertisers to provide a state license number, customers will also need to provide a status identification. Despite the efforts, Weedmaps CEO Chris Beals said the California black market would not really be affected as more and more municipalities will not allow legal cannabis sales.
"While these policy changes will only have a symbolic impact on California's unlicensed market size with no more licensing opportunities and other large trading platforms." we want to continue to give the example, "said Beals in a statement.
89% of California cities – 89 out of 482 – allow retail stores to sell cannabis for recreational purposes. While many major cities, including Los Angeles, San Diego and San Francisco, allow the sale of commercial cannabis, even these cities have struggled to limit the black market.
Earlier this year, an audit of the Weedmaps in the Times revealed that there are at least 220 unlicensed clinics in Los Angeles. In comparison, the city has issued only 187 temporary licenses for legal windows.
Queally reported from Los Angeles and McGreevy from Sacramento. The Times personal writer, Ben Welsh, contributed to this report.
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