Adam JacksonAs cannabis executives continue to cite illicit cannabis markets as one of their main obstacles, several states across the U.S. seem to be intensifying efforts to combat unlicensed outfits that have been undermining the patchwork legal industry.
From coast to coast, authorities are trying to address the issue and protect consumers and legitimate businesses.
Minnesota
The Minnesota Department of Health has been conducting compliance checks on retailers selling hemp-derived cannabinoid products. State inspectors have seized and destroyed approximately $500,000 worth of illegal cannabis products, with 65% of the 1,000 compliance checks resulting in violations, according to local news station KCCO this week.
Retailers found in violation of state regulations face fines of up to $10,000 per incident. The state currently has 3,917 registered retailers of hemp-derived cannabinoid products, ranging from grocery stores to liquor stores and supplement stores.
California
California’s Unified Cannabis Enforcement Taskforce seized more than $53.6 million in illegal cannabis, eradicated more than 54,000 unlicensed plants, and made four arrests in the first quarter of the year.
The taskforce, which was created by Gov. Gavin Newsom in 2022, served a total of 18 search warrants in various counties, including Alameda, Fresno, Kern, Los Angeles, Riverside, San Joaquin, and Orange County.
Since its inception, UCETF has seized $371.2 million in unlicensed cannabis through 236 search warrants, eradicated 401,458 plants, and seized 139 firearms, according to the Department of Cannabis Control.
“California is home to the largest legal cannabis market in the world,” Newsom said in a statement Thursday. “As we continue to cultivate a legal marketplace, we’re taking aggressive action to crack down on those still operating in the shadows — shutting down illegal operations linked to organized crime, human trafficking, and the proliferation of illegal products that harm the environment and public health.”
The enforcement activity is welcome, but questions remain as to if it’s enough, as the illicit market is still thriving.
Maine
Maine lawmakers recently debated a controversial bill, LD 2204, designed to target illegal marijuana grows using racketeering laws and restricting citizens from China, Cuba, Iran, North Korea, and Russia from purchasing real estate without becoming permanent residents.
Critics called the bill discriminatory and unconstitutional, arguing that similar laws have been found unconstitutional in other states. It came after lawmakers urged the U.S. Department of Justice to take action against illegal Chinese-owned marijuana growing operations in the state.
The bill ultimately failed to pass in the state legislature, but efforts are still ongoing in the state to lessen the impact of the illicit market. For example, utilities are already openly discussing ways to share information with law enforcement to crack down on unlicensed grows.
New York
New York has been grappling with the rampant proliferation of unlicensed cannabis shops (it’s bananas).
But according to the Times Union newspaper, lawmakers and Gov. Kathy Hochul recently agreed on series of policy measures to be included in the budget that will help local municipalities shut down illicit storefronts, which have been openly advertising and selling unregulated marijuana products at prices far lower than licensed retailers.
With only $150 million of the $7 billion in sales last year coming from licensed retailers, the state is focused on increasing penalties for shop owners selling unlicensed cannabis and improving coordination between state and local agencies for enforcement.
Oklahoma
Oklahoma has escalated it fight against illegal cannabis operations, with the Oklahoma Bureau of Narcotics aggressively targeting criminal organizations operating illegal farms.
Since 2021, the OBN has shut down more than 2,500 marijuana grows, arrested more than 250 individuals, and seized more than 975,000 pounds of marijuana as part of criminal investigations into farms operating with fraudulently obtained licenses or growing for out-of-state black markets, according to a local Oklahoma City FOX affiliate.
The enforcement efforts have led to a dramatic reduction in the number of illegal grows in the state, with registrations for growers falling from 9,400 in 2021 to around 3,000 now, according to state data. And with a moratorium in place to mitigate the saturation, expect enforcement efforts to continue.
