We’ve been saying for the last year that as California’s legal marijuana program continues to roll out, the state’s enforcement against illegal operators will continue to ramp up. During his state of the state address on February 12, 2019, Governor Gavin Newsom announced that the National Guard will be utilized to eliminate unlicensed cannabis farms. On February 11th, Gov. Newsom signed General Order 2019-01 that will redeploy 360 National Guard troops from the U.S.-Mexico border to other state assignments by March 31st.
According to Newsom, some of those troops will be “redeploying up north to go after illegal cannabis farms, many of which are run by cartels, are devastating our pristine forests and are increasingly becoming fire hazards themselves.” The governor’s order authorizes the expansion of the California National Guard’s statewide Counterdrug Task force by at least 150 personnel and authorizes 100 personnel to conduct counter narcotics search and seizure operations targeting transnational criminal organizations around ports of entry. The order also notes that “since 2018, National Guard service members have participated in the seizure of 71,488 pounds of illegal cannabis.”
What remains unclear, however, is how the National Guard troops will proceed with implementing enforcement against illegal operations. California has had a long history of battling illegal marijuana grows and of dealing with the accompanying environmental destruction. Back in 2015, then-Governor Jerry Brown signed into law a measure that provided for steep civil penalties against marijuana grows that “damage the environment by dumping wastewater and chemicals, removing trees and killing wild animals.” The measure increased the California Department of Fish and Wildlife’s power over illegal marijuana grow operations on public lands, but the Department’s resources have still proved insufficient to eliminate these operations completely. In the year prior to the signing of this measure, state agents “found more than 135 dams or diversions in rivers and streams that resulted in the theft of about 5 million gallons of water for marijuana grows.” This law provided that fines of up to $40,000 may be assessed for illegally dumping certain kinds of hazardous materials into rivers and streams, and fines of up to $10,000 may be assessed for removing trees or trapping and killing wildlife. But unfortunately, the potential financial gains of continuing to operate illegally often outweigh the potential penalties.
And while the black market in California has no doubt been fueled by prohibition, even in the wake of legalization and regulation, the high barriers to entry for many small businesses hoping to enter the legal market will likely serve to keep that black market alive for many years to come. We anticipate that National Guard troops will be utilized to weed out unlicensed operators that are engaged in commercial cannabis activity in violation of MAUCRSA, likely prioritizing those trespass operations that are on public lands and/or causing environmental destruction, as many of these types of operations have ties to organized crime.
Operators still attempting to obtain licensure from the state need to play by the rules too, as operating a commercial cannabis business without a license is not legal. We’ve said it many times before that in order for state legalization to succeed in the long run, state and local governments need to take serious enforcement measures against black and “gray” cannabis markets in order to ensure that there is an even playing field for licensed operators burdened by licensing and regulatory compliance costs as well as heavy taxation. We see this move by Governor Newsom as a step in the right direction.