Crackdowns of black market operations in legalized territory are amping up

Operating a dispensary without a license? Beware! Los Angeles and several other California cities are increasing efforts to stop cannabis operations that continue to operate without a license.

Officials initially issued warnings to the many perpetrators, but after many months of noncompliance, LA is now filing criminal charges against various retailers, growers, and delivery services. 

The Los Angeles Daily News reports that earlier this month, prosecutors there have charged 515 people for helping to run 105 illegal marijuana operations: 

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

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.

California and other legalized states, like Washington, and Colorado, continue to struggle with black market operations well after legalization has taken effect. In an effort to level the playing field, Los Angeles and other cannabis officials say they will take all measures necessary to crackdown on illegal operations. The 120 criminal cases recently filed in LA are intended as a loud and clear signal to all cannabis operators that they must follow the licensing regulations, or face the consequences. 

--Manda Mosley Maier