California Suspends More Than 400 Licenses as Feds Debate Marijuana

By Brad Jones, published November 18, 2019, in The Epoch Times, State Suspends More Than 400 Marijuana Licenses as Federal Legalization Debate Looms

Amid a renewed push to legalize marijuana federally, California has suspended 407 marijuana business licenses, affecting about five percent of legal cannabis supply chains, ranging from manufacturers to retailers.

Forbes Magazine reported on Nov. 16 that “a key congressional committee plans to hold a historic vote on a bill to end the federal prohibition of marijuana next week, two sources with knowledge of the soon-to-be-announced action said.”

Rep. Jerry Nadler (D-NY), who leads the House Judiciary Committee, and 2020 Democratic Party presidential primary contender Sen. Kamala Harris (D-CA) teamed up to push legislation that seeks to legalize pot nationwide, and that a vote on the House floor could come before the end of the year, reported the magazine in July.

But recently, in Harris’s home state, the Bureau of Cannabis Control (BCC) clamped down on 407 marijuana retailers, delivery services, distributors and micro-businesses that failed to comply with mandatory track-and-trace training and credentialing, according to a report in Marijuana Business Daily. The businesses are prohibited from conducting normal activities until they have met state requirements.

State regulation and state lobbyists

The BCC regulates 2,630 marijuana companies that hold either provisional or annual licenses, while the California Department of Food and Agriculture (CDFA) oversees 3,830 pot farmers and the California Department of Public Health (CDPH) regulates 932 manufacturers.

BCC spokesman Alex Traverso told Marijuana Business Daily that the affected businesses have had plenty of time to complete mandatory track-and-trace training and upload inventory data using required Metrc software so the state can regulate the cannabis supply chain.

Josh Drayton of the California Cannabis Industry Association (CCIA) told the news outlet that the suspensions could create a bottleneck in supply.

“There’s a huge pause right now. And in a time when we’re trying to incentivize consumers to buy regulated, tested product … it’s minimizing their options. We’re kind of incentivizing the illicit market, which is a much more affordable option right now,” Drayton said. “What we really need to be focused on is access and affordability.”

Cannabis industry advocates say the suspensions could lead to an increase in black market sales. One of the common positions of legal pot advocates have made in the past is that legal marijuana would eliminate the black market, keep drugs away from minors, and generate tax revenue for the state.

Taxes much less than expected

Although the state was expected to collect about $643 million tax revenue from marijuana taxes within the first year of legal pot sales, it collected about half of that estimate, according to a recent Forbes report.

But the black market has only grown and become more emboldened, according to Scott Chipman, a spokesman for Americans Against Legalizing Marijuana (AALM).

Illegal pot shops vastly outnumber permitted pot shops in the state, Chipman told The Epoch Times.

“For every one pot shop that is permitted, we estimate there are three that are not. And then, for every three that are not, we would estimate there are probably 10 delivery services,” he said.

“In San Diego, for example, we had 250 unpermitted stores at one time. It took about a year to a year-and-half to go from one to 250,” Chipman said.

Eventually, police began closing down some of the illegal pot shops, but found that many of them would open up a week later in the same location, according to Chipman.

“Then, when law enforcement got a little stronger, they would just move down the street to a new location. And then, when law enforcement got even stronger, they just went to delivery,” he said.

One illegal pot shop that was shut down, simply posted a “Walk-in delivery” sign. Customers would walk into the shop, look at photos of the marijuana inventory, pay for the product, and go down the street where they would get their pot “out of the back of a car,” Chipman said. “The number of ways drug dealers will get around regulations, permitting and law enforcement is infinite.”

The Gateway Drug

Former Vice President Joe Biden said at a town hall in Las Vegas on Saturday more debate is needed on the issue, defending his long-held position against legalizing marijuana on a federal level.

Biden said: “The truth of the matter is, there’s not nearly been enough evidence that has been acquired as to whether or not it is a gateway drug. It’s a debate, and I want a lot more before I legalize it nationally. I want to make sure we know a lot more about the science behind it.”

Chipman said marijuana is “absolutely” a gateway drug.

Scott Chipman comments

“If people are using marijuana as teens and young adults, and then they’re offered other drugs, it’s very common for them to move on to other drugs. Anecdotally, what we hear from teens and young adults is when the marijuana runs out, there is always somebody who has pills,” Chipman said. “And, when you’re using marijuana, your ability to make smart choices about moving on to another drug is severely compromised.”

But a “gateway drug” for users may be more like a floodgate for dealers.

“There is a huge amount of competition to sell marijuana, and so if there are so many people selling marijuana now that [they] are having a hard time making a living—an illicit living, I should say—then there is an incentive to move on to something else—other drugs,” Chipman said.

Legal marijuana has not reduced the use of other drugs, he said.

“Drug use in the United States generally is going up. Alcohol use is going up as a result of marijuana legalization. That was measured in Colorado shortly after legalization. They thought that alcohol consumption would go down, but it has not. It’s gone up,” said Chipman. “Once you are in the habit of getting into a mentally altered state, the drug you use is not that specific. Most of the time, people are using multiple drugs. They either crossfade drugs together or they’ll use one drug one day and a different drug another day. It’s rare that you see people using just one drug.”

The Epoch Times published a followup article on November 20,  2019: More Than a Million Marijuana Plants Seized, 148 Arrested in Raids in 2019