Acknowledging the situation we’ve covered here several times – the booming black market in cannabis sales – California is considering steep new fines on illegal sellers and those who assist them.
legalization, a large part of the reason the black market continues to thrive. After a statewide legalization initiative was passed, the Golden State left it up to individual communities to decide whether or not to allow dispensaries.
Many of those communities, especially in conservative areas of the state, decided against allowing legal sales, though some are reconsidering that decision as the coronavirus pandemic has slashed tax revenues. Declining tax revenue at the state level is a large driver of this new bill as well.
It’s not entirely California’s fault … the fact that marijuana remains on the Federal controlled-substance list hampers banking industry-wide. In California, that’s resulted in the spectacle of legitimate growers traveling several hours to Sacramento with bags of cash to pay their taxes.
So yes, punish those who are unfairly competing with legitimate, licensed businesses. But attention should be paid to the reasons why these illicit operators are thriving in the first place.
The black market in California is more than just street-corner sales: late in 2019 search warrants were served at 24 unlicensed storefronts in Los Angeles, resulting in the seizure of nearly $9 million in cannabis products.
The new bill targets those who provide building space, advertising platforms and other help to illicit organizations. Some have even appeared on otherwise legitimate web directories of dispensaries. Civil fines of up to $30,000 per day could be assessed under the new bill, which has passed the state Assembly and is pending in the Senate.
While anything that hampers black-market operations is welcome, in our opinion this approach amounts to bailing the water out of the basement without first fixing the roof. California needs to revisit its approach to