Black market marijuana is a billion-dollar industry in California, but it soon could become very expensive to do business with unlicensed operators.
California Assemblywoman Blanca Rubio, D-Baldwin Park, has introduced legislation that would levy up to $30,000 in fines for each offense of those caught “aiding and abetting” illicit commercial cannabis activity.
Currently, the law provides for a fine of up to three times the amount of the state license fee for any person caught engaging in unlicensed commercial cannabis activity. That number can fluctuate depending on the business’s revenue.
Assembly Bill 2122 would crack down on businesses that support unlicensed cannabis operators, said Taylor Woolfork, Rubio’s legislative director.
That includes property managers, billboard advertisers and “anyone directing business toward the unlicensed market and illegal operators,” Woolfork said.
Rubio acknowledged the scope of California’s black market in a statement announcing her bill.
“California’s illicit cannabis industry accounts for nearly 75 percent of all cannabis sales in the state, enticing often unknowing consumers with seemingly harmless products at lower prices, but the danger lurks beneath the surface,” she said. “I introduced (Assembly Bill) 2122 to help the state hold illegal operators accountable and protect California consumers from the serious health risks found in the untested and unregulated products from the illicit market.”
The black market is a huge industry in the Golden State. In 2019, the Bureau of Cannabis Control alone seized more than 24 tons of illicit cannabis.
Unlicenced cannabis products are not subject to state testing standards, leading to potentially dangerous products being sold.
In Los Angeles, the bureau seized more than 10,000 cannabis vape products last December, many of which were cut with a chemical linked to a deadly disease outbreak.
In response to the black market, the bureau is seeking to make it mandatory for cannabis retailers to display a QR code that provides consumers with licensing information.
Rubio’s bill drew support from industry group, the United Cannabis Business Association.
“AB 2122 would put another tool in our enforcement toolbelt that we can use to limit access to the untested, untraceable, untaxed and often dangerous products flowing through illicit stores every single day,” said UCBA President Jerred Kiloh in a statement. “The size and scope of the illicit market is the number one issue facing California cannabis, posing not only an existential threat to the industry itself, but also putting the health and wellbeing of Californians at risk, it simply cannot be ignored – we look forward to supporting the assemblymember in advancing this critical solution.”
However, the bill could have unintended consequences in communities that have been slow to license cannabis retailers, said industry consultant Jacqueline McGowan. California cities have a say in whether a legal marijuana store can open within their boundaries. McGowan suggested amending the bill to exclude jurisdictions where officials have resisted granting licenses.
“While I see this as a much needed tool to use in areas that have a robust commercial retail market, I also see how this could be a potential deterrent to regulating in areas of the state that do not offer their residents legal access,” McGowan said. “If law enforcement in areas like Kern and Fresno Counties felt the fines were a money maker, then they would never be inclined to create a safe and regulated marketplace for their consumers.”
