Inside California’s Black Market Weed Boom

[Music] all right the first search warrant we're gonna hit today is a hundred greenhouses i'm gonna lead us in uh gonna take it nice and slow on the dirt road it's been over five years since california voters legalized recreational marijuana one of the aims was to stamp out the illicit market but these deputies in san bernardino county find themselves reading more illegal pot farms than ever before the team got information from a resident that complained that the illegal water trucks were hauling out here and they found several outdoor illegal cultivations of marijuana if you're tending to the grow you're looking at a at a citation um that's it's a misdemeanor but you maybe get a 500 fine for it 500 plants you have a thousand plants you have a million plants it's still a misdemeanor so you feel like legalization with those drop penalties has emboldened the black market growers to just go wild yes there's no there's no threat of penalty these are just perfect areas and locations to set these up for massive operations like this with thousands of plants low penalties have become just the cost of doing business what's gonna happen to that guy most likely it's gonna be a marijuana citation and we'll release them with uh covet and stuff we'd rarely uh take these people into jail unless it's a violent felony but this is huge this is just some of the the processed marijuana that they raided here this big mountain of pot is kind of a drop in the bucket there's sites like this all around us basically as far as the eye can see other greenhouses illegal grow hops so the sheriffs could be raiding properties like this all day every day and still not get rid of all of them just in this one corner of the county the harm is that these growers can use toxic chemicals and pesticides hijack water and destroy the environment the sheriff's department says organized crime has taken advantage this county has seen seizures of illicit weeds skyrocket over the last five years and other areas across the state report similar problems california's illicit market is worth an estimated eight billion dollars annually that's roughly double the volume of licensed and tax sales part of the problem is that while marijuana possession and consumption is legal everywhere growing and commercial distribution is not more than half of all california counties have local laws banning retail marijuana activity in san bernardino both cultivation and sales are prohibited do you think this site would have existed five years ago before recreational legalization in california no once the legalization happened we saw this outdoor trend what can the state do about it the fines the fines need to impact the landowners who allow this you don't need to go to jail but your crops worth a million dollars you owe us half a million dollars to the state do you feel overwhelmed by this problem out here it's just very time consuming some of these grow sites in about three to four months are back up again and running um because the repercussions aren't there so they just go back in business talk about whack-a-mole yeah it's what is whack-a-mole illegal grow operations aren't just springing up in the california desert follow me and here we go this is where the magic happens and these plants are illegal in the eyes of the state of california correct when we walked in here you have no idea that there's a grow operation going on here it's super discreet and that's the point this grower who asked to be identified as doc operates indoor grows in the suburbs he's been working illegally for two decades and he says the business is better than ever now that legalization has gone up we've seen a rise in the amount of weed that we're selling in the neighborhood wait wait you sell more weed illegally in the legal era than you did before when it was illegal definitely once you get used to a certain strain or you're a certain smoke you're looking for something that's a little bit more potent potency is what you're gonna find in the hood if you're a tourist you're gonna go to a dispensary because you're not knowing that there's far better weed in the neighborhood do you ever see yourself going to the legal market i've been wanting to go to the legal market um but if it doesn't happen i'm not gonna be upset because i'm gonna keep doing what i'm doing you know you've got people that aren't even from los angeles coming in and raking in huge profits from a business and industry that we created we created this they didn't create this one of doc's new competitors in the underground market calls himself dank he told us he invests in legal grows but he also bankrolls this unlicensed farm you can just see uh see how how tight the the buds are coming up there's not a lot of spacing on the plant which gives you a higher yield these buds are a little dense too if you squeeze them oh yeah that's sticky too yeah yeah it's a really sticky high resin production this is the good stuff right here dank says an eighth of his dispensary grade weed can sell on the street for half the price the store charges it's so cheap because he's not paying taxes and neither is the consumer if this were legal how much would you be paying towards taxes legal i would probably estimate tens of thousands of dollars annually they're blocking out so many people in the market that want to participate how much do you expect to profit from it right now without it being legal about a hundred thousand dollars people have told me they perceive me as a criminal for doing this and you know in many instances it's just operating without a license just like other businesses that are just trying to get started in an industry i mean do you feel like you're criminal when you're doing this no morally i'm not you know i don't feel like i'm doing anything wrong not at all do i feel like a criminal even those who've been able to break into the legal market complain that the system is broken elliot lewis runs a chain of dispensaries in southern california but he's struggling to compete with unlicensed dealers how profitable in reality is it to run a legal cannabis business in california right now it's not profitable at all the store we're standing in right now is still in the red it's losing money that's crazy you're losing money running a legal cannabis store yes the only way we're able to survive is we're running really really low corporate overhead and we have a few stores that are profitable right some make a tiny bit some make a little bit more but when you're in expansion mode it's not really anything that's significant with all the taxes and the regulations it's very very hard to squeeze out any profit and there's really no large amounts of money to be made in the industry right now lewis claims some of his licensed competitors are diverting millions of pounds of product to the illegal market allowing businesses to dodge taxes and luring more customers away from his cash registers he blames california's department of cannabis control for the problem and late last year he sued the state for failing to take action we're taking you to court we're getting a injunction it's catalyst with the industry on our back against the state of california the idea of the lawsuit is to embarrass the out right so their program is an abject failure and they want to put their head in the sand and not admit it attorneys for the state called the lawsuit uncertain ambiguous and unintelligible the case is still playing out in court but lewis isn't alone in his complaints last month a group of marijuana business owners sent a letter to governor gavin newsom warning that the industry is collapsing under high taxes and competition from the illicit market in a statement to vice news the governor's office acknowledged that the current system is not perfect and said quote the cannabis tax structure is presenting unintended but real challenges for components of our legal market some parts of california are trying to bring people who were once outlaw growers into the legal marketplace ryan brown served five years in state prison for a case that involved marijuana charges he qualified for a social equity program that moves people affected by the drug war to the front of the line for marijuana business licenses in my mind i'm a felon i've been a prison not in a hundred years what i thought that i would be able to own a dispensary or have anything to do with legalize marijuana not for 100 years but the system is not working as intended of the 205 verified social equity applicants in los angeles qualified to run retail shops only 38 have actually managed to obtain temporary licenses to operate it's harder than people actually think you know because to actually get your license but you have to have a building within los angeles city not to mention um the taxes you know it makes it almost impossible to operate especially for somebody that doesn't have a bunch of money even to get started how much of your own money have you spent trying to get this off the ground uh 30 40 50 000 something like that and still not able to operate and see any return don't they how's that feel humiliating yeah does it ever make you think about going back to the illicit marketplace definitely definitely step in any day

Channel: VICE News

Views: 7,624,282

Keywords: VICE News, VICE News Tonight, VICE on HBO, news, vice video, VICE on SHOWTIME, vice news 2020

Id: QbhzM6vrNho

Length: 9min 36sec (576 seconds)

Published: Sun Jan 16 2022

Reddit Comments

[u/BansheeJeff]

To bad expenses are so much for a legal weed store. What would happen if that was a illegal distillery?