Business Crime Law Legalization State

Nearly 3,000 illegal marijuana businesses found in California audit

Merchandise for sale at an illegal marijuana dispensary shut down in Wilmington earlier this year. (Allen J. Schaben / Los Angeles Times)

California’s black market for cannabis is at least three times the size of its regulated weed industry, according to an audit made public Wednesday, the latest indication of the state’s continued struggle to tame a cannabis economy that has long operated in legal limbo.

The audit, conducted by the United Cannabis Business Assn., found approximately 2,835 unlicensed dispensaries and delivery services operating in California. By comparison, only 873 cannabis sellers in the state are licensed, according to the Bureau of Cannabis Control.

The figures are the latest sign of California’s rocky rollout of its legal marketplace, which promised better regulations and control beginning in 2018. Legitimate marijuana businesses have repeatedly criticized state leaders and law enforcement for failing to curb unlicensed dispensaries and delivery services, which sell cannabis at a much lower price by skirting state and municipal cannabis taxes.

This year, an industry-backed financial audit projected that roughly $8.7 billion will be spent on unregulated cannabis products in California in 2019, compared with just $3.1 billion spent on cannabis sold by legal businesses.

Officials have also warned that cannabis products sold in the illegal marketplace can pose health risks because the edible products, vaping pens and flower on shelves of illicit stores have not been subject to state testing. Since June, the California Department of Public Health has linked more than 60 cases of acute lung disease to patients who had recently used vape pens, and it warned that many of those people had recently purchased products from unlicensed shops.

To Read The Rest Of This Article By James Queally and Patrick McGreevy on Los Angeles Times

Published: September 11, 2019

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