California's Illicit Cannabis Market Faces Regulatory Action, $20M To Regularize Legal Sales

According to a new report, released by the California Department of Cannabis Control (DCC), the agency has vastly improved enforcement of illicit marijuana operations over the past two years in the state.

The report's enforcement statistics show the following:

• Search warrant operations increased from 62 in 2021 to 155 in 2022, up 150%.
• Seizures of illegal weed reached 144,254 pounds in 2022, a 246% jump from 41,726 pounds a year earlier.
• Arrests in 2022 more than tripled to 56.

Also, “seizures of illegal cannabis in 2022 hit $243 million, a 211% year-over-year increase from about $78 million, though monetary estimates are often inflated by government agencies,” per MjBizDaily.

David Hafner, a spokesman for the DCC, commented: "We have been focused on cultivation efforts in 2022 which have a higher yield of illegal cannabis versus dispensaries (...) There's always a safety risk with these illegal operations because many of these are organized by criminal organizations who often are armed and dangerous."

In addition, he said "less than 40% of the state has licensed retail establishments and so people in most of the state if they want to buy cannabis conveniently, they're turning to the illegal market," per Fox KTVU.

Nevertheless, the DDC recently launched a $20 million grant program to boost cannabis retail programs in the state. The Local Jurisdiction Retail Access Grant seeks to provide resources to local jurisdictions to expand access to cannabis products "in underserved areas while prioritizing markets that support social equity opportunities," per MjBizDaily. 

“Expanding access to California’s retail cannabis market is an important step towards protecting consumer safety and supporting a balanced market,” said DCC director Nicole Elliott. “The retail access grant program ultimately seeks to encourage legal retail operations in areas where existing consumers do not have convenient access to regulated cannabis.” The agency will begin accepting grant applications on March 10. 

How Are California's Legal Sales Doing?

The Golden State, which eliminated the cannabis cultivation tax as of the 3Q of 2022, received $221.65 million in tax revenues from legal weed sales in the 4Q, down $330.5 million in the period of the previous year. The Tax and Fee Administration Dept. recently revealed data showing that customers bought $5.3 billion worth of legal pot products in 2022, which represents an 8% drop or decrease of $473 million from what customers purchased in 2021.

The Benzinga Cannabis Capital Conference Is Back!

The most successful cannabis business event in the world, the Benzinga Cannabis Capital Conference returns to Miami for its 16th edition. Here is where DEALS GET DONE, where money is raised, M&A start and companies meet investors and key partners. Join us at the Fontainebleau Miami Beach Hotel in Florida on April 11-12. Don’t miss out. Secure your tickets now before prices go up.

Image Credits: 12019, greenserenityca by Pixabay Edited By Benzinga