Black market – MJ Shareholders https://mjshareholders.com The Ultimate Marijuana Business Directory Sun, 25 Oct 2020 02:45:36 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.5 Editorial: Striking a proper balance on local cannabis rules https://mjshareholders.com/editorial-striking-a-proper-balance-on-local-cannabis-rules/ Sun, 25 Oct 2020 02:45:36 +0000 http://www.thecannifornian.com/?p=16140 There’s little to be gained from continuing to debate the wisdom of legalizing marijuana. It makes more sense to focus on eradicating the black market.

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If legalizing cannabis was a simple matter, Proposition 64 could have been written in a lot less than 62 pages of small type.

But personal possession and use of marijuana have been effectively decriminalized in California for many years, and the primary purpose of the 2016 initiative was to turn a black-market enterprise into a commercial business.

Even at 30,415 words, Proposition 64 left some tough choices to local governments, including whether to authorize commercial marijuana farming in Sonoma County’s unincorporated neighborhoods.

We chose the word “authorize” because cannabis gardens of varying size already exist in many rural residential areas, often without proper permits. Some neighbors object to the skunky odor and, having witnessed violent home invasions, fear for their safety.

Finding common ground won’t be easy, but revisions to Sonoma County’s cannabis ordinance slated for consideration today by the Board of Supervisors would be a good first step.

Under the revised rules, growers would be required to:

— Obtain a use permit for cultivation on properties smaller than 10 acres in nonindustrial zones. The process includes notifying neighbors, environmental review and public hearings.

— Obtain a zoning permit for larger properties. These permits are easier to obtain, but approvals could be appealed to the county Board of Zoning Adjustments.

— Live on-site during cultivation in residential areas.

Neighborhoods could seek a special zoning designation prohibiting cannabis farming, an approach the board took with vacation rentals.

The proposal also offers added flexibility for growers, including:

— Authorizing cultivation permits for 651 parcels zoned rural residential or agricultural residential where cannabis farming isn’t presently allowed.

— Extending the life of cannabis use permits from one year to five and the life of cannabis zoning permits from one year to two.

— Allowing permits to be transferred to a new owner.

Neither side is entirely satisfied with this proposal, but both sides stand to gain. And the county plans to continue its review of cannabis regulations, so further adjustment are possible.

From our perspective, the top priority is public safety.

A thriving black market remains almost two years after voters approved Proposition 64, as evidenced by a series of violent home invasions in Sonoma County earlier this year and the recent kidnapping and killing of a Cloverdale man, which investigators attribute to marijuana dealing.

Rogue cannabis farms also pose a threat to water supplies and wildlife habitat.

Growers who come out of the shadows should be less likely to cause environmental damage, and they may be more likely to take advantage of offers from the Sheriff’s Office to consult on safety and security measures. The permitting process, in turn, would give residents assurance that growers are operating with county oversight.

By some estimates, there are 5,000 marijuana growers in Sonoma County, but fewer than 180 had applied for permits through mid-July. That’s a lot of room for improvement.

We opposed Proposition 64, but voters approved it by a substantial margin, so there’s little to be gained from continuing to debate the wisdom of legalizing marijuana. It makes more sense to focus on eradicating the black market. Striking a balance between the commercial interests of legal growers and the property rights of their neighbors is a good place to start.

© 2018 The Press Democrat (Santa Rosa, Calif.). Visit The Press Democrat at www.pressdemocrat.com. Distributed by Tribune Content Agency, LLC.

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Editorial: Local marijuana taxes would harm legal pot market https://mjshareholders.com/editorial-local-marijuana-taxes-would-harm-legal-pot-market/ Wed, 24 Oct 2018 21:15:18 +0000 http://www.thecannifornian.com/?p=17164

More local taxes threaten to undermine California’s fledgling legal pot industry and drive consumers underground to purchase their weed.

Voters should reject proposals on the Nov. 6 ballot for new marijuana business taxes in Union City (Measure DD), Emeryville (Measure S) and unincorporated Contra Costa (Measure R),

One key argument to California voters in 2016 for legalizing marijuana was that it would help wipe out the black market by allowing consumers to buy their pot at local dispensaries.

The marijuana would be safer, taxes could help cover related law enforcement expenses, and illegal cultivation and production, along with the associated crime, would be curtailed.

The problem is that it’s apparently not working, or at least not nearly as well as promoters and state officials had forecast. Legal marijuana sales have fallen far below expectations — state tax revenues were less than half what was forecast — while illegal sales continue to flourish.

One major concern is the high level of state and local taxes, which can add as much as 40 percent to the price of legal pot. State lawmakers this year even proposed lowering the state tax. While the bill didn’t pass, it should be a wake-up call: This is no time for more local governments to start jumping on the weed-tax bandwagon.

Voters wanted a legal marijuana market. Let’s give it a chance to take root.

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A push for cannabis grow compliance in Yuba County https://mjshareholders.com/a-push-for-cannabis-grow-compliance-in-yuba-county/ Thu, 27 Sep 2018 16:15:26 +0000 http://www.thecannifornian.com/?p=16829

It’s that time of year when a potent, skunk-like aroma permeates the Yuba County foothills, causing annoyed neighbors to call Code Enforcement.

Though complaints keep Code Enforcement busy year-round, September and October are prime harvest months for marijuana plants grown outdoors. Just Monday, with four inspection warrants, more than 730 plants were found to be out of compliance with the county’s ordinance, Code Enforcement manager Jeremy Strang said.

Yuba County adopted a marijuana ordinance in 2012 and it has been modified a few times, Strang said. The ordinance allows for six plants to be cultivated indoors. No outdoor growing is permitted. Strang said of all the inspections his department makes, maybe 1 percent of those are in compliance. Of the roughly 99 percent of marijuana growers out of compliance, Strang said about half the time there is voluntary compliance when it comes to removing plants when caught in violation.

“I guess it’s amazing that people just choose not to follow the rules,” Strang said.

He said there is a dividing line between what Code Enforcement and law enforcement does as it relates to marijuana regulations: Code Enforcement does not seize marijuana and does not raid gardens–it seeks civil inspection warrants, inspects properties for possible violations, and issues an abatement order if there is a violation. If there’s criminal action to be taken, law enforcement – like Yuba County Sheriff’s Office – issues the criminal search warrant and seizes any criminal property. Code Enforcement does not make arrests.

The recurring trend, Strang said, is the distinct growing style found in the foothills. Code Enforcement consistently finds hoop-style greenhouses with running generators, gas cans near generators, and long runs of extension cords – all built without permits or inspections.

“Most often times, it’s done in such a way that it creates fire hazards to the public,” Strang said.

This time of year, outdoor or greenhouse-grown plants mature and becomes easier to see and smell. But plants inside homes and other undercover grows cultivate well into winter, he said.

“The bigger push does exist through September and October and depending on the weather, could go into November,” Strang said.

Marijuana is the second most common case Code Enforcement handles, behind vehicle and ahead of visual blight cases. In fiscal year 2017-18, the department closed 221 marijuana cases with another 248 still active.

“Our job here is to educate the public on what the Board adopts,” Strang said. “With marijuana, the ordinance has not changed. The public should be aware of what is allowed and not allowed. It would be helpful if they followed the ordinance. That’s the goal – to gain compliance.”

© 2018 the Appeal-Democrat (Marysville, Calif.). Visit the Appeal-Democrat at www.appeal-democrat.com. Distributed by Tribune Content Agency, LLC.

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Sonoma County says it’s shut down more than 600 illegal cannabis operators since last year https://mjshareholders.com/sonoma-county-says-its-shut-down-more-than-600-illegal-cannabis-operators-since-last-year/ Mon, 24 Sep 2018 17:45:23 +0000 http://www.thecannifornian.com/?p=16774

Sonoma County on Friday touted its efforts to rein in unauthorized cannabis operations after facing criticism from some rural residents who say county officials haven’t done enough to shutter pot farms that don’t have permits.

Since the start of last year, code enforcement staff members have forced more than 600 unpermitted cannabis operations to close and billed more than $435,797 in fines, according to a Friday statement from the county’s planning department, Permit Sonoma. The county said it quickly responds to cannabis-related complaints and forces operators to comply with county rules.

Maggie Fleming, spokeswoman for Permit Sonoma, said the statement was issued in response to community feedback and a “lack of understanding that the county was taking action” against cannabis businesses operating without permits.

“We really just wanted to educate people on the work that’s been happening,” she said.

Complaints about the county’s cannabis-related code enforcement were recently lodged by a group of residents outside Petaluma who sued a nearby pot grower in federal court last month. The county had started enforcement actions when the suit was filed, but critics said the process didn’t move fast enough.

In a subsequent deal with county code authorities, the cultivation company tentatively agreed to stop operating after harvest and the owner of the property agreed to amend the deed to prohibit growing marijuana.

Fleming said that property is not included in the list of unpermitted operations the county says it has shut down because the deal is still being finalized.

The county said it has received 682 complaints about cannabis cultivation on private property since January 2017. So far, staff members have inspected 662 of those properties, forcing 638 to stop growing and allowing 24 to continue operating while seeking a permit. Another 20 inspections are scheduled “in the near future,” the county statement said.

Kevin Block, a Napa-based lawyer representing the neighbors outside Petaluma who filed the federal lawsuit, was skeptical of the county’s numbers.

“They paint a picture of swift and effective enforcement, and what I’m seeing and hearing on the ground is anything but,” Block said. “They’re trying their best, I’m sure. I give them credit for that. But what they really need to do is they need to put this cannabis program on hold until they can devote the resources necessary to implement it in an orderly way and to make it work for everybody.”

Assuming the code enforcement deal is finalized and implemented, Block said his clients will still seek damages and attorneys’ fees.

Pot growers, meanwhile, have their own concerns with the county.

Tawnie Logan of Santa Rosa-based Canna Code Compliance said removing illegal operators is “absolutely essential” but the county has been “woefully underperforming” its processing of permits for cannabis growers.

“Operators are going broke. They cannot continue to afford to play the waiting game that the county has put them in,” said Logan, former executive director of the Sonoma County Growers Alliance. “It’s offensive … to say that they’re investing so much money and time into illegal operators while they continue to be understaffed and underperforming for the businesses that want to be compliant and legal.”

© 2018 The Press Democrat (Santa Rosa, Calif.). Visit The Press Democrat at www.pressdemocrat.com.  Distributed by Tribune Content Agency, LLC.

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Los Angeles charges 515 people with running illegal marijuana businesses as part of black market crackdown https://mjshareholders.com/los-angeles-charges-515-people-with-running-illegal-marijuana-businesses-as-part-of-black-market-crackdown/ Mon, 10 Sep 2018 15:30:47 +0000 http://www.thecannifornian.com/?p=16568

Prosecutors in Los Angeles have charged 515 people for helping to run 105 illegal marijuana operations, the City Attorney’s office said Friday.

The sweep is part of an effort to level the financial playing field for licensed cannabis businesses, which have suffered by competing with black market operators who remain active despite new licensing requirements and regulations that kicked in Jan. 1.

“Our message is clear: If you are operating an illegal cannabis business you will be held accountable,” Los Angeles City Attorney Mike Feuer said.

After months of only issuing warning notices, state officials announced in August that they were starting to pursue criminal charges against unlicensed cannabis retailers, distributors and growers.

It’s widely believed that Los Angeles has the world’s biggest marijuana market, and businesses have thrived for years under the state’s loose medical marijuana laws. But since the start of the year, new California laws have required all cannabis businesses to have both a state and city license to operate — licenses that can add costs to operations in the form of fees, testing requirements and hefty taxes.

The new laws also let cities regulate the marijuana industry, and many cities so far have opted against allowing such operations. Los Angeles, however, began licensing retail outlets in late January and most other types of marijuana businesses on Aug. 1. As of Friday, the city said 163 businesses have been given temporary licenses to operate.

But that represents just a fraction of the overall marijuana market, and for the past eight months, the City Attorney’s office coordinated with the Los Angeles Police Department to identify and investigate businesses that were operating without licenses. Most are retail shops, the City Attorney’s office said, but action also was also taken against marijuana growers, extraction labs and delivery services.

Since the investigation started, Feuer said 23 of the 105 unlicensed businesses identified by his office have shut down.

Most of the 515 people charged in the crackdown were business operators, according to Feuer. But he said there are also some landlords and employees facing charges in 120 separate criminal cases.

All of the defendants face misdemeanor charges, punishable by up to six months in jail and $1,000 in fines. That’s based in part on Proposition 64, which reduced the punishments for nearly every marijuana crime in addition to legalizing recreational marijuana use.

The action was well-received by City Councilwoman Nury Martinez. Buoyed by a concern that black market cannabis businesses can congregate in poorer neighborhoods and minority areas, Martinez has advocated for policy that cracks down on illegal dispensaries and regulates legal ones in her district, which includes Van Nuys, Panorama City and Sun Valley.

“Since the city began its work on laws regarding cannabis, I have been consistent in my argument that we must enforce these new regulations,” she said in a statement. “Today, we are letting our residents and those who want to flout our laws know that the city is not going to stand idly by, while the safety of our communities are at risk.”

Both Feuer and LA Police Chief Michael Moore acknowledged that they still have a lot of work to do to eliminate the black market.

“There are still hundreds of these locations out there,” Moore said.

Authorities are reviewing another 40 marijuana businesses now, Feuer said, to see if they are operating properly. He encouraged residents to report businesses that they believe may not be operating illegally through a new online portal at cannabis.lacity.org.

Greg Meguerian, who operates the licensed dispensary Reefinery in Van Nuys, said the crackdown announced by Feuer on Friday “is not enough.”

Meguerian says that he has had to raise money to operate his cannabis shop legally. Meanwhile, unlicensed businesses can still claim some legal protection under the state’s medical marijuana laws, since so-called “collectives” don’t have to dissolve until the end of the year.

Until then, Meguerian said, “We’re just trying to survive.”

The crackdown in Los Angeles isn’t happening in a vacuum. Last month, after giving businesses more than seven months to comply with new licensing requirements, state authorities said they have started to team up with local police to target unlicensed marijuana businesses. The state agency that regulates marijuana, the Bureau of Cannabis Control, last month said it helped to shutter an unlicensed marijuana shop in Costa Mesa and launch an enforcement action against an unlicensed delivery service in Sacramento.

Both businesses were included in the more than 1,000 complaints the state has received since Jan. 1. In that time, the bureau also has sent more than 2,500 cease and desist letters to marijuana businesses that appear to be operating without licenses, according to spokesman Alex Traverso, who added that more than 500 complaints remain under investigation.

Cities and counties throughout the state are also stepping up enforcement efforts.

San Diego authorities announced in August that they’ve shut down 11 unlicensed marijuana delivery services and arrested 34 people as part of a year-long operation.

The Riverside County District Attorney’s Office also recently formed a new marijuana task force that served its first search warrant Aug. 23 on an unlicensed dispensary operating out of a large trailer in Jurupa Valley.

Staff writer Elizabeth Chou and editor Ryan Carter contributed to this report.

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State begins crackdown on black market marijuana retailers, starting in Costa Mesa https://mjshareholders.com/state-begins-crackdown-on-black-market-marijuana-retailers-starting-in-costa-mesa/ Tue, 28 Aug 2018 18:56:49 +0000 http://live-cannabist.pantheonsite.io/?p=16407 State authorities teamed up with local police to shut down an unlicensed marijuana shop in Costa Mesa, in what regulators say is the first of many coordinated efforts to target California’s massive black market for cannabis.

The bust signals a clear shift, with the state moving from issuing warnings for off-the-grid cannabis retailers to cracking down on operators who haven’t made efforts to comply with state licensing requirements and regulations that kicked in nine months ago, on Jan. 1. That likely includes thousands of businesses, with industry research firm New Frontier Data estimating California’s black market remains more than four times larger than the state’s legal market in 2018.

“We gave people an opportunity to come out of the shadows and to get adjusted to the new legal market,” Alex Traverso, spokesman for the Bureau of Cannabis Control, said Tuesday.

“I think it’s safe to say that any kind of unspoken grace period is over.”

The Bureau of Cannabis Control has received more than 1,000 complaints over the past nine months, Traverso said, mostly related to businesses reportedly selling marijuana without licenses.

Many of those complaints have come from businesses who’ve paid hundreds of thousands of dollars to secure state and local permits, cover tax bills and comply with testing requirements. Those business owners say they can’t compete with illicit shops who can undercut their prices and don’t have to comply with rules that limit hours of operation, potency of products and more. Traverso said those licensed businesses have been flooding the state with complaints in hopes of getting underground competitors shut down.

Several of those complaints were about the Church of Peace and Glory in Costa Mesa.

Despite its name, authorities say the facility that shared a parking lot with the 7-Eleven on Irvine Avenue at 17th Street did not appear to be using marijuana as part of any sort of religious service. Instead, it advertised itself on dispensary directory Weedmaps.com as a “chic recreational cannabis boutique” selling marijuana to anyone 21 and older with an ID.

While medical and recreational marijuana are now legal in California, cities get to decide if they will allow cannabis retailers and other cannabis-related businesses in their boundaries. Costa Mesa doesn’t permit marijuana stores of any kind, though it does allow cannabis distribution, manufacturing and testing labs. All cannabis businesses need local and state permits before they can begin operations.

Omid Delkash, 47, of Newport Beach was arrested Friday on charges of selling marijuana without a license in Costa Mesa. (Courtesy of Orange County District Attorney)

Costa Mesa Police say Omid Delkash, 47, opened the Church of Peace and Glory in March, and that they launched an investigation of the shop two months later. Costa Mesa Code Enforcement issued two citations for an unlawful marijuana business at the site.

The Costa Mesa Police Department served a search warrant at the facility on Friday, Aug. 24, getting help from the Department of Consumer Affairs’ Division of Investigation-Cannabis Enforcement Unit. Authorities said Monday that they arrested Delkash without incident and seized an undisclosed amount of cannabis, edibles and tobacco products.

A phone number for the shop has been disconnected and no one immediately responded to an emailed request for comment on the search.

Delkash is charged with four misdemeanor counts of transporting, selling and furnishing cannabis. Charges are tied to sales that allegedly took place in May, twice in June and in July.

Those charges would have almost certainly been felonies two years ago, with Delkash then likely facing up to four years in prison. But Proposition 64, which legalized recreational marijuana in November 2016, downgraded just about every marijuana-related crime in the state. Now, unless the district attorney pursues an enhanced sentence for repeated offenses, Delkash may face just six months in jail.

Delkash pleaded not guilty during an arraignment Monday. He is being held in lieu of $150,000 bail at the Central Men’s Jail in Santa Ana, with his first hearing set for Friday.

The Newport Beach resident has an extensive criminal history in Orange County dating back to 1996, according to court records, with prior convictions that include battery, forgery, burglary and grand theft. Such a record doesn’t automatically disqualify Delkash from getting licensed to sell marijuana in California, though the cases involving fraud and violence could be grounds for state and local authorities to deny him permits.

The Church of Peace and Glory case marks the first time Costa Mesa police have collaborated with state marijuana regulators, according to police department spokeswoman Roxi Fyad. She said the partnership gives them additional resources and investigatory tools to go after unlicensed marijuana businesses.

Since Jan. 1, the state has sent more than 2,500 cease and desist letters to marijuana businesses that appear to be operating without licenses in California, according to Traverso. Going forward, the bureau will continue to send warning notices, he said, but officials also will step up enforcement against businesses that don’t appear to making any effort to comply with state laws.

Right now, Traverso estimated Consumer Affairs’ cannabis enforcement unit is investigating between 500 and 600 complaints the bureau has forwarded their way. And he said we can expect to see more unlicensed marijuana businesses shut down “relatively soon.”

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New task force shuts down Jurupa Valley marijuana dispensary https://mjshareholders.com/new-task-force-shuts-down-jurupa-valley-marijuana-dispensary/ Mon, 27 Aug 2018 16:15:22 +0000 http://www.thecannifornian.com/?p=16377

A new marijuana task force created by the Riverside County District Attorney’s Office served its first search warrant Wednesday, Aug. 22, shutting down what it said was an unlicensed dispensary in Jurupa Valley.

Several pounds of cannabis, THC pods, edibles, paraphernalia, wax and vape cartridges were seized, according to a DA’s news release. Several people were detained but not arrested as the investigation continues.

The dispensary was operating out of a modular trailer on a dirt lot that had been advertising on marijuana-related websites as The Mission and 35 CAP. An online search shows a location for 35 CAP in the 5500 block of Mission Boulevard.

The partners in the Cannabis Regulation Task Force include the Hemet Police Department.

The task force’s goal is to ensure fair business practices and keep crime out of the legal cannabis industry in the county and its communities, the release said.

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Could Oregon’s cannabis oversupply hurt California’s legal market? https://mjshareholders.com/could-oregons-cannabis-oversupply-hurt-californias-legal-market/ Mon, 06 Aug 2018 14:00:39 +0000 http://www.thecannifornian.com/?p=16100 PORTLAND, Ore. (AP) — Two of the first states to broadly legalize marijuana took different approaches to regulation that left Oregon with a vast oversupply and Colorado with a well-balanced market. But in both states prices for bud have plummeted.

A new Oregon report by law enforcement found nearly 70 percent of the legal recreational marijuana grown goes unsold, while an unrelated state-commissioned Colorado study found most growers there are planting less than half of their legal allotment — and still meeting demand.

The reports offer case studies for California and other pot-friendly states as they ramp up their legal pot industries. They also underscore some key differences in how broad legalization was handled that have helped shape differently evolving markets in each state.

FILE – In this Sept. 30, 2016, file photo, a marijuana harvester examines a bud that is going through a trimming machine near Corvallis, Ore. A new report by the Oregon-Idaho High Intensity Drug Trafficking Area finds that Oregon is producing 2 million pounds of cannabis, about five times more than the demand in the state of about 4 million people. (AP Photo/Andrew Selsky, File)

The Oregon study released by the Oregon-Idaho High Intensity Drug Trafficking Area — a coalition of local, state and federal agencies — includes the medical and general-use markets and the illegal market, despite gaps in data on illicit marijuana grows.

It noted Oregon still has a serious problem with out-of-state trafficking and black market grows — and the top federal law enforcement officer in Oregon demanded more cooperation from state and local officials Thursday in a strident statement.

“What is often lost in this discussion is the link between marijuana and serious, interstate criminal activity. Overproduction is rampant, and the illegal transport of product out-of-state — a violation of both state and federal law — continues unchecked,” said Billy Williams, U.S. Attorney for Oregon. “It’s time for the state to wake up, slow down and address these issues in a responsible and thoughtful manner.”

The Colorado study, released Thursday, focuses on the legal, general-use market, and researchers at the University of Colorado Boulder’s business school and a Denver consulting firm had access to state tracking data to produce the first-of-its-kind analysis.

Colorado sales of broadly legalized marijuana began in 2014, roughly two years before Oregon allowed marijuana to be sold at non-medical retail stores. From the beginning, Colorado had stricter regulations for its growers than Oregon did.

Colorado gave existing medical marijuana growers the right of first refusal for licenses, cutting down right away on a potential source of black market production. The state also requires growers to show they have sold 85 percent of their output before allowing them to expand their growing operation, said Beau Whitney, senior economist at national cannabis analytics firm New Frontier Data.

“That was the right approach, and we’ve made that recommendation to other state regulators to do that because if you exclude the medical folks from entering the market, then there could be propensity for diversion” to the black market, he said.

FILE – This Sept. 30, 2016, file photo shows a marijuana bud before harvesting near Corvallis, Ore. (AP Photo/Andrew Selsky, File)

“Colorado has done a good job in sizing the market. In Oregon, it’s going to take a while for that balance to be established.”

Oregon didn’t give existing medical marijuana growers priority over new applicants as Colorado did, and it also didn’t cap licenses. That created a perfect storm of endless licenses for all comers paired with less incentive for medical growers to enter the new industry.

In June, the Oregon Liquor Control Commission, which oversees general-use marijuana, did put a pause on issuing new grow licenses to work through a monthslong backlog of applicants. The Legislature will likely consider steps to get a handle on oversupply in the 2019 session.

The Pacific Northwest state also had to contend with a long-entrenched culture of illegal marijuana cultivation along its border with California, where there are near-perfect outdoor growing conditions. That tradition of illicit marijuana has created a nightmare for law enforcement agencies in rural, heavily forested counties already stretched thin by budget cuts.

The Oregon report, for example, noted nearly 15,000 pounds (6,800 kilograms) of marijuana with a street value of $48 million has been seized heading to 37 other states. That doesn’t include illegal pot snagged at Portland International Airport.

“I know a lot of the legal industry in Oregon has been asking for stepped-up enforcement to combat illegal operations, but there doesn’t appear in those conversations a clear owner of the law enforcement,” Whitney said.

Although Colorado has been more successful in finding a balance between supply and demand, retail prices for bud, or marijuana flower, have plummeted in both states about 50 percent since 2015.

That statistic could be deceiving, however, because most growers are now cultivating their crop for conversion into the increasingly popular oil extracts that wind up in everything from soaps to vape pens to edible gummies to salves. It takes 10 times more dried flower to make an oil extract and much of the dried flower is going to that market, Whitney said.

FILE – This Sept. 30, 2016, file photo shows a marijuana bud before harvesting near Corvallis, Ore. (AP Photo/Andrew Selsky, File)

“What the report demonstrates to us is that our licensed operators are operating responsibly,” said Mike Hartman, executive director of the Department of Revenue, which oversees marijuana regulation. “They’re not overproducing the amount of product they’re putting in the marketplace. They are operating to maximize product but also … emphasizing public health and safety.”

At Green Dot Labs in Boulder, CEO Alana Malone estimated the company grows about 1,600 of its allotted 1,800 plants that are used to produce cannabis oil products.

As one of Colorado’s oldest companies focused on producing extracts from marijuana plants, Malone said decisions about how much to plant are based on expected demand — and consumers’ interest in the type of concentrate products that Green Dot Labs produces is growing.

Malone said she was pleased that the Colorado study found about 32 metric tons of marijuana flower left in inventory by the end of 2017.

“That’s not even close to some of the figures you see from others states,” Malone said. “So I’m a little bit proud of that.”

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Mojave Desert town Newberry Springs among new marijuana-growing meccas vexing law enforcement https://mjshareholders.com/mojave-desert-town-newberry-springs-among-new-marijuana-growing-meccas-vexing-law-enforcement/ Fri, 06 Jul 2018 18:22:47 +0000 http://live-cannabist.pantheonsite.io/?p=15758 NEWBERRY SPRINGS — Along a dusty dirt road in this Mojave Desert outpost 20 miles east of Barstow, U.S. postal worker Jessica Garcia stopped at the few houses dotting Morgan Lane and unloaded packages from the back of her 4-wheel-drive Jeep Wrangler.

On this day, the pungent odor of marijuana was not wafting in the air, at least not on Morgan Lane. But it certainly was elsewhere — at the all-too-familiar marijuana compounds with padlocked front gates and pot grows concealed by chain-link and plywood fencing and black or green mesh fabric screening.

“I have been working for the post office for a year now. Driving the route, you smell it while you’re driving by,” said Garcia, 39, delivering mail at a home that just a week before had been raided by San Bernardino County sheriff’s deputies. More than 1,000 pot plants and 16 pounds of processed marijuana were seized from the residence. Four people were arrested.

The San Bernardino County Sheriff’s Marijuana Enforcement Team served search warrants at several residences in Phelan, Calif. on Thursday, June 21, 2018. (Sarah Alvarado for The Cannifornian/The Sun)

Although California law now allows the use of both recreational and medical marijuana, cultivation and sales of the drug can be strictly regulated by cities and counties. And in unincorporated San Bernardino County, marijuana cultivation for commercial purposes is prohibited.

In the past five years, the San Bernardino County Sheriff’s Department’s Marijuana Enforcement Team has seized nearly half a million marijuana plants and nearly 17,000 pounds of processed marijuana from across the High Desert region, mostly in the areas of Newberry Springs, Phelan and Lucerne Valley — all pot-growing meccas for people seeking fortune in the booming industry.

“The High Desert area is definitely our busiest area for marijuana grows. They are spread throughout the county, but the highest concentration is the High Desert,” said Sgt. Rich Debevec, who heads the Marijuana Enforcement Team.

Remote location ideal for illegal pot farms

Since 2012, marijuana cultivation has ramped up in Newberry Springs, an alfalfa and pistachio farming community off Highway 40 known for the Bagdad Cafe, of the cult classic German film namesake. Debevec said the community’s remote location and cheap property make it ideal for illegal pot growing.

“They hear you can go to Newberry Springs and live and make some money,” Debevec said. “When you’re going to grow that many marijuana plants, it’s pretty easily detected, so the farther out, the better for them.”

The San Bernardino County Sheriff’s Marijuana Enforcement Team served search warrants at homes in Phelan, Calif. on June 21, 2018. (Sarah Alvarado for The Cannifornian/The Sun)

Many locals appear indifferent to the increasing number of marijuana farms popping up in their community and are becoming immune to the presence of law enforcement, which shows up for raids in SUVs, pickups with trailers hitched behind and, sometimes, helicopters hovering overhead.

“They come in caravans,” said Bagdad Cafe employee Michael Wright, a 42-year resident of Newberry Springs. He said there is no escaping the strong odor of fresh-cut marijuana piled in trailers as law enforcement hauls it away for destruction after a raid.

“You can smell it as they drive by. Some of it’s flying out the top,” Wright said. Locals, he said, often scavenge for any trace of marijuana left behind at the raided properties.

In Phelan, about 16 miles west of Hesperia, a sheriff’s MET raid on June 21 netted more than 3,100 plants from four domed greenhouses, an outbuilding and an outdoor garden at a home on Pacific Road and 932 pounds of processed marijuana from three residences. Fifteen people were arrested by MET deputies assisted by the California National Guard Counterdrug Task Force.

Chinese immigrants arrested

Many of the growers arrested in recent years have been Chinese nationals, raising questions about why they are here, how they are recruited and who is financing their operations. During the raid in Phelan, deputies arrested Zhixue Fan, a 62-year-old Chinese citizen; Guoxo Yang, 48, of San Gabriel; and Jia Zhi Shi, 39, a Canadian citizen.

From August 2015 to June 6, sheriff’s deputies arrested dozens of Chinese immigrants during raids in Newberry Springs, where hundreds of pounds of processed marijuana were being packaged and shipped out across the country, mainly to the East Coast. Those arrested came from all over California and the rest of the country — Tennessee, Las Vegas, Porterville, Fresno and New York, among other cities.

Debevec could not say whether the growers are involved in a Chinese crime ring, but he has reached out to federal authorities. He would not elaborate.

The San Bernardino County Sheriff’’s Marijuana Enforcement Team served search warrants at several residences in Phelan, Calif. on Thursday, June 21, 2018. (Sarah Alvarado for The Cannifornian/The Sun)

In Northern California -— Sacramento, Placer, Yolo and Yuba counties, specifically — Chinese marijuana cultivation operations at suburban homes have led to five indictments in the past five years and the seizure of more than 100 properties believed to have been purchased by a Chinese crime syndicate, court records show.

One indictment, filed in August 2017 in U.S. District Court in Sacramento, alleges that over a four-month period in 2016 one of 10 defendants received three wire transfers totaling $146,955 from China Construction Bank in Fujian, China. The money was used for down payments on homes to be used for marijuana cultivation.

They were making large cash down payments on homes, usually 50 percent down, and the rest was financed by hard money lenders,” said Michael Anderson, supervising assistant U.S. attorney and head of the white collar crime division for the U.S. Department of Justice’s Eastern District in Sacramento. “It’s a fairly interesting and direct link back to China. An unusual method of financing.”

Federal prosecutors allege that at least $6.3 million has been wired from Chinese banks to the U.S. in the past five years to purchase properties for commercial marijuana cultivation. Each wire transfer was for less than $50,000, the threshold at which financial institutions would have to report the transactions.

Human trafficking at play

Anderson said some of the Chinese nationals identified in the Northern California cases may have been working the marijuana grows to pay off a debt for their safe passage to the U.S.

“Indoor marijuana grows associated with criminal organizations raise significant concerns about human trafficking,” Anderson said. “Investigators pay particular attention to the individuals found at the grows, some of whom may be working to pay off debts to the criminal groups.”

The San Bernardino County Sheriff’’s Marijuana Enforcement Team served search warrants at several residences in Phelan, Calif. on Thursday, June 21, 2018. (Sarah Alvarado for The Cannifornian/The Sun)

The elusive culprits in all this are the “dragonheads” — those who fund and organize the marijuana growing operations, said Thomas Yu, a retired Los Angeles County sheriff’s detective who investigated Asian gangs for years. He said federal prosecutors have only scratched the surface, and to really make a dent they need to take down the ringleaders, or “dragonheads.”

“Those cases, for lack of a better word, they’re being prosecuted in a vacuum. They’re not prosecuting the guys who are the dragonheads at the top of the food chain,” Yu said.

He said the Chinese crime syndicates recruit skilled farmers from Fujian, China, to cultivate marijuana in the U.S., as well as electricians to bypass electricity needed to power the hydroponic equipment used for indoor cultivation. “They steal (electricity) from the power poles,” Yu said.

Unlike hard drugs such as cocaine and heroin, penalties for marijuana cultivation and distribution are particularly lenient in the U.S., especially in states like California, Washington and Colorado, where the drug is now legal for both medical and recreational use. Most offenders get off with probation and fines, which may be why Chinese crime syndicates are exploiting opportunities to cash in on the expanding and lucrative marijuana industry in the U.S., Yu said.

Debevec said another trend has emerged among marijuana growers in recent years that could explain the proliferation of pot farms in the High Desert: an exodus of growers from the San Bernardino Mountains, once a hot spot for large-scale marijuana cultivation.

“Our National Forest grows were huge. We’d get thousands of plants in a forest grow,” Debevec said. “That’s a federal crime and a 10-year mandatory minimum. They realize they can come down here into the valley and do it in smaller plots and face less charges if they get caught. It definitely wouldn’t be a federal charge, and, in a lot of cases it would be a misdemeanor.”

And so the marijuana growers continue flocking to the High Desert to harvest their crops, which has some, like Newberry Springs postal worker and resident Jessica Garcia, somewhat perturbed. She’s tired of the stink marijuana brings to her community, literally.

“I wish they’d go away,” she said.

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