Opt-Out of Cannabis Industry

Commercial Marijuana in Tuolumne County has been promoted at recent BOS meetings and election forums.  During my campaign to become the District 3 Supervisor, I ran on a platform opposing commercial marijuana. I don’t care if adults choose to smoke marijuana. I oppose the commercialization of the cannabis industry in Tuolumne County as it will ruin us like it did in Calaveras County.

Black Market Expands with Commercialization

We were told legalization would end the black market. A recent Politico article “How Legal Marijuana Is Helping the Black Market” explains “one widespread side effect of marijuana legalization in the U.S.: In many cases, it has fueled, rather than eliminated, the black market…Three years after Massachusetts voters approved full legalization of marijuana, most of the cannabis economy consists of unlicensed ‘private clubs’, home growing operations and illicit sales.” https://www.politico.com/magazine/story/2019/07/21/legal-marijuana-black-market-227414

CNN elaborates how California pot taxes help the black market. “members of California’s cannabis industry are sending an S.O.S. to the state capitol, saying they’re struggling to compete against black market operators who don’t have to meet stringent regulations or pay taxes and fees.” https://www.cnn.com/2019/11/26/business/california-cannabis-industry-layoffs/index.html

The LA Times article “California now has the biggest legal marijuana market in the world. Its black market is even bigger” puts 2019 legal pot revenues at $3.1B and black market revenues at $8.7B, which means 74% of the pot revenue is exchanged on the black market. https://www.latimes.com/california/story/2019-08-14/californias-biggest-legal-marijuana-market

Another LA Times article describes how a legitimate, large-scale cannabis operation was found to be part of the black market. “When county officials gave reporters a tour of a licensed grow last year, they picked Brand’s operation on Foothill Road to showcase how their regulations were working and would make it all but impossible to divert marijuana to the black market.  On Jan. 22, detectives served a search warrant at the farm and reported finding a stash of more than 100 gallons of concentrated cannabis oil, an extraction lab and evidence of “off-book” sales” — all illegal.” https://www.latimes.com/california/story/2020-02-14/carpinteria-pot-farm-accused-of-selling-on-black-market

NPR reports “that even five years from now, the illicit market will still account for 53% of all cannabis sales in California.” https://www.npr.org/2019/08/23/753791322/california-says-its-cannabis-revenue-has-fallen-short-of-estimates-despite-gains

Crime Expands with Commercialization

KPCC/SCPR describes how neighboring Calaveras County has experienced outpriced land, higher crime and a change in the culture. “Schmiett says parcels worth 75 thousand were going for 200 thousand. Out of town growers were grabbing land before the county or state could regulate marijuana cultivation…Counties scrambled and several decided to ban marijuana grows all together rather than rush through regulations. Meanwhile, the Calaveras County Board of Supervisors moved to regulate marijuana… Tomaszewski categorizes the flood of growers who came after the Butte Fire as largely ignorant about local regulations as well as local culture…Calaveras County Sheriff Rick DiBasilio links a recent rise in crime to transient marijuana workers who come to Calaveras during harvest season. ‘We have one guy we caught, I believe he was from Kansas,’ recalls DiBasilio. ‘He had burglarized either three or four houses. So, what brought him out here was marijuana, he was a trimmer. And now he’s robbing our homes.’… Calaveras County resources are overwhelmed. This rural county already faced considerable challenges before the Butte Fire. A high unemployment rate, problems with meth addiction and trees dying from beetle infestation. Add the potential ecological impact of illicit pot grows on the Sierra landscape.” https://www.scpr.org/news/2016/11/03/65910/calaveras-county-copes-with-change-after-influx-of/

Drug Cartels Expand with Commercialization

Newsweek describes cartel expansion. “The men, who were all Latino, described to the police where the farm was located, just outside a heavily forested area in California’s Calaveras County. Soon, the authorities sent up a team to raid the farm. What they discovered: more than 23,000 marijuana plants producing upwards of $60 million worth of weed. They also found two women they believe were selling marijuana for the Mexican drug cartels…. But federal authorities say Mexican drug cartels are propping up black-market marijuana farms like this all across Northern California…Today, California is the epicenter of black-market marijuana in the U.S., with over 90 percent of the country’s illegal marijuana farms…. Today, activists in California counties such as Calaveras are pushing back, trying to ban cannabis farms to cut off the cartels. They say drug traffickers are importing automatic weapons and using illegal, highly toxic pesticides that are eviscerating forest animals and poisoning freshwater sources. “We’re going down the toilet bowl,” says Calaveras County Sheriff Rick DiBasilio, “and it’s not going to get any better.” Now that the state has legalized recreational marijuana, growers are rushing into rural areas in Northern California to set up illegal farms, with one county even declaring a “state of emergency” last September over the rise of black-market growers…. the California attorney general’s office believe the illegal weed goes into the nationwide pipeline coordinated by organizations such as the Sinaloa cartel and La Familia Michoacana. One piece of evidence? Phone calls and wire transfers of money that travel south, to the border.” https://www.newsweek.com/2018/01/19/mexican-drug-cartels-taking-over-california-legal-marijuana-775665.html

Youth Access Increases with Commercialization

A recent RAND study “Young Adults Who Live Near Medical Marijuana Dispensaries Use Marijuana More Often, Have More Positive Views” states, “Living near more medical marijuana dispensaries that had storefront signage was associated with a four to six times larger effect both on marijuana usage and on positive expectations about marijuana. https://www.rand.org/news/press/2019/06/17.html

The Rocky Mountain HIDTA report states that Colorado’s past month marijuana use among youth ages 12 to 17 years old is 40% higher than the National average in 2016/2017.  The more accessible marijuana is to youth, the more they use it. https://rmhidta.org/files/D2DF/FINAL-Volume6.pdf

And why the concern about youth access?  A study of twins shows that for every 10 high school sophomores who use or have used marijuana, 6 will suffer from stimulant addiction, 4 will suffer from addiction to cocaine or hallucinogens and 1 will suffer from other addictions.  This compared to virtually 0 addictions to those who have not use marijuana. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3717485/

California Tax Revenues Fall Well Below of Expectation

The Mercury News article “California made $345 million, not predicted $1 billion, on legal cannabis in 2018” reports, “Former Gov. Jerry Brown budgeted for the state to take in $185 million in excise and cultivation taxes over the first six months of the year. California missed that mark by more than $100 million. For the current fiscal year, from July 2018 to June 2019, Brown initially budgeted for the state to take in $630 million in marijuana tax earnings. Newsom’s proposed budget substantially dropped that forecast down to $355 million this fiscal year.” https://www.mercurynews.com/2019/02/19/california-made-345-million-not-predicted-1-billion-on-legal-cannabis-in-2018/

NPR reports for July 2018 to June 2019 the estimate dropped even farther: “In May, Newsom’s budget lowered its expectations for the cannabis excise tax, to $288 million in the current fiscal year”. https://www.npr.org/2019/08/23/753791322/california-says-its-cannabis-revenue-has-fallen-short-of-estimates-despite-gains

Calaveras County is finding “Marijuana Production Financial Impact: No Benefit – All Costs. No Substantial Revenue Collected – When the County Chief Administrative Officer was asked what the associated costs of the new marijuana ordinance in relation to revenue, he could not supply the information. Taxpayers Pay the Cost of Pot Growing – The urgency ordinance fees did not cover the county’s cost to clean up the damage to the environment, eradicate plants, force compliance, prosecute crimes and many other costs. The only cost the growers pay is the expense of the processing of their application. All other costs were funded by Taxpayers.” https://www.mymotherlode.com/community/blogs/calaveras-the-sky-isnt-falling

The long-term prospects for tax revenues are not good.  According to Forbes, “Simply put, in the long term it will be simply untenable for large-scale indoor cannabis producers in the United States and Canada to survive. Even greenhouse producers in most regions of the country will struggle to compete with low-cost production on the west coast and Latin America. For those companies currently spending millions of dollars building out state-of-the-art, high-tech, clean-room cultivation facilities across Pennsylvania, New York, Florida, Massachusetts, and elsewhere in the United States, be warned, you may find yourselves stuck with a beautiful state-of-the-art dinosaur.” https://www.forbes.com/sites/kriskrane/2018/04/25/cannabis-cultivation-will-be-a-race-to-the-bottom/

Read the Propaganda Hype Carefully

A recent Leafly article sings the praises of benefits Californians are reaping from marijuana taxes.  This article published January 24, 2020 estimates California took in $538M in state cannabis tax revenue for CY2019.  Yet the NPR article estimates the figure at $288M for FY2019.  Now some of the difference could be Fiscal vs. Calendar year, but that is a huge difference.  Leafly goes on to stay that California will allocate $332.8M in FY2021 for all the social programs mentioned in the article.  But just adding up the list of goodies comes to $387.6M, a basic addition error of $54.8M.  In all likelihood, because of the black market, tax revenues will not pan out and the spending forecast described in this article will not happen.  Just like SB-1 money is supposed to fix our roads. https://www.leafly.com/news/politics/californias-635m-in-cannabis-taxes-where-is-it-going

In summary. I do not care if adults choose to smoke pot, and neither do our county ordinances. What is concerning is that numbers don’t add up, and crime rates, black market and youth use is increasing. While the cannabis industry is hell-bent on forcing their agenda on the counties, three fourths of the counties in California have discovered it is not all it’s cracked up to be and are deciding to OPT-OUT of allowing commercialized cannabis. As a policy maker, I will not rush into this mess. I spoke with a County Commissioner in Colorado who told me that opening the door to commercial cannabis is like turning a light on in a dark room; do it and you attract all the bugs. I would hope any current or future Board member or City Council member would think twice before opening the floodgates.

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Anaiah Kirk District 3 Supervisor 2022
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