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New California Laws Crack Down on Illicit Cannabis Sales

New California Laws Crack Down on Illicit Cannabis Sales

A customer buys cannabis products at a store in West Hollywood, Calif., on Jan. 2, 2018. (David McNew/Getty Images)

Brad Jones

Brad Jones

10/17/2023

Updated: 10/24/2023

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Illegal cannabis dealers will face stiffer penalties and fines under legislation that California Gov. Gavin Newsom signed into law on Oct. 8.
The three new laws—Assembly Bills 1684, 1126, and 1171—will take effect on Jan. 1, 2024.

Assembly Bill 1126

The Cannabis: citation and fine law, authored by Assemblyman Tom Lackey, a Republican, will increase penalties for unlicensed cannabis dealers caught using the universal cannabis symbol—which is required for licensed cannabis businesses—in their business dealings and on their illicit products.
The law makes use or possession of each individual package, label, advertisement, or other object using the universal symbol a separate offense, and such items will be considered contraband and subject to seizure and forfeiture by the California Department of Tax and Fee Administration or the police.
Under the current law, the state’s Department of Cannabis Control is authorized to issue citations and levy fines to dealers who don’t comply with state regulations, with fines to not exceed $5,000 per violation by a licensee and $30,000 per violation by an unlicensed entity.
A local company offers cannabis samples in Santa Ana, Calif., on Feb. 18, 2021. (John Fredricks/The Epoch Times)

A local company offers cannabis samples in Santa Ana, Calif., on Feb. 18, 2021. (John Fredricks/The Epoch Times)

The new law requires anyone using or possessing the universal symbol in connection with cannabis commercial activity to maintain and produce records showing that they’re in compliance with the law.
According to a bill analysis, in August 2019, “the number of emergency department visits related to cannabis vaping products sharply increased, with a total of 2,807 hospitalized cases or deaths reported to the U.S. Centers for Disease Control and Prevention.” It warns that because unlicensed cannabis products aren’t tested, consumption can pose a significant health risk to consumers.
“It is believed that much of this ‘vaping crisis’ was the result of untested, unlicensed manufactured cannabis products,” the analysis reads.
A report published by the Reason Foundation estimates that as many as two-thirds of cannabis transactions in California occurred on the black market in 2021.
Mr. Lackey said in the analysis that while state law requires licensed cannabis companies to use the universal symbol on all packaging, nothing in the existing law prohibits the use of the symbol by unlicensed dealers.
The universal symbol is “widely used by non-licensees to legitimize intoxicating hemp products and illicit cannabis products with potency levels that far exceed the limits [that the law allows],” he noted.
“In fact, empty ‘cannabis’ packages are available for bulk purchase at most local tobacco and smoke shops and online for pennies per package, specifically designed to [fool] the consumer into believing the product placed inside is safe and legal,” Mr. Lackey said.
“This bill makes fraudulent use of the universal symbol a crime and seeks to enhance consumer confidence in legal cannabis products.”
People stand in line outside of a store that sells marijuana for recreational use in West Hollywood, Calif., on Jan. 2, 2018. (David McNew/Getty Images)

People stand in line outside of a store that sells marijuana for recreational use in West Hollywood, Calif., on Jan. 2, 2018. (David McNew/Getty Images)

Assembly Bill 1171

The Cannabis: private right of action law, authored by Assemblywoman Blanca Rubio, a Democrat, allows legal cannabis dealers that are licensed under the Medicinal and Adult-Use Cannabis Regulation and Safety Act to sue anyone selling cannabis or participating in a cannabis business without a license in California Superior Court.
Licensed cannabis dealers must demonstrate in court the “actual harm” resulting from the unlicensed commercial cannabis activity. Licensed dealers who prevail in court will be entitled to the recovery of “reasonable attorney’s fees and costs” and “either actual damages or statutory damages” to not exceed $75,000.

Assembly Bill 1684

The Local ordinances: fines and penalties: cannabis law, authored by Assemblyman Brian Maienschein, a Democrat, expands the power of local jurisdictions to immediately impose fines against any type of illegal cannabis business, including cultivation, manufacturing, processing, distribution, or retail sale of cannabis and would authorize local governments to declare such commercial activity a public nuisance.
The new law prohibits the ordinance from imposing a fine or penalty exceeding $1,000 per violation or $10,000 per day on the property owner and each owner of the business located on the property that’s engaging in illegal commercial cannabis activity.
According to Mr. Maienschein, most cannabis cultivation, manufacturing, and retail sales operations in the state remain unlicensed, and many cannabis products make their way to consumers through illegal channels from businesses that don’t comply with safety and testing requirements, environmental laws, labor and employment laws, and building and fire code requirements, nor pay applicable taxes and license fees.
“Unlicensed commercial cannabis activity poses significant danger to the public, to the environment, and to the viability of the legal marketplace,” he wrote in a bill analysis.
California Attorney General Rob Bonta speaks at the district attorney building in Santa Ana, Calif., on Sept. 8, 2022. (John Fredricks/The Epoch Times)

California Attorney General Rob Bonta speaks at the district attorney building in Santa Ana, Calif., on Sept. 8, 2022. (John Fredricks/The Epoch Times)

Bonta Weighs In

California Attorney General Rob Bonta wrote an argument in support of Assembly Bill 1684, arguing in a bill analysis that it expands the power of local jurisdictions to immediately impose fines against any type of illegal cannabis business, which “will have a greater deterrent effect against those who might otherwise use or allow their property to be used for unlicensed cannabis activity.”
Mr. Bonta said the new law encourages communication between local jurisdictions and the attorney general’s office, making it easier to enforce state laws and regulations.
Nearly 1 million illegally cultivated cannabis plants were destroyed and more than 200,000 pounds of illegal processed marijuana were seized during the 2022 season as part of the state Department of Justice’s Campaign Against Marijuana Planting (CAMP) program, the attorney general said in an October 2022 statement.
Since 1983, more than 33 million illegal cannabis plants have been seized under the annual 13-week program. Starting in the fall of 2022, the seasonal program transitioned into a year-round task force.
“California has the largest safe, legal, and regulated cannabis market in the world, but unfortunately illegal and unlicensed grows continue to proliferate,” Mr. Bonta said.
Illegal marijuana cultivation threatens public lands by introducing dangerous pesticides, unlawfully diverting waterways, and involving drug traffickers, Dylan Ragan, special agent in charge of the Bureau of Land Management’s Office of Law Enforcement and Security in California, said in the statement.
There are roughly 5,000 greenhouses illegally cultivating marijuana in Siskiyou County, Calif., according to the county's sheriff's office in March 2023. (Courtesy of the Siskiyou County Sheriff's Office)

There are roughly 5,000 greenhouses illegally cultivating marijuana in Siskiyou County, Calif., according to the county's sheriff's office in March 2023. (Courtesy of the Siskiyou County Sheriff's Office)

During the 2022 season, CAMP teams “conducted 449 operations, recovered 184 weapons, and removed nearly 67,000 pounds of cultivation infrastructure, including dams, water lines, and containers of toxic chemicals, such as carbofuran, methyl parathion, aluminum phosphate, zinc phosphide, and illegal fertilizers,” according to the statement.
“Carbofuran, in particular, poses untold risks to public health. A lethal insecticide that is effectively banned in the United States, carbofuran remains on plants after application and seeps into soil and nearby water sources. Just a quarter teaspoon of carbofuran can kill a 600-pound lion,” the statement reads.

Other Legislation

Another law, Senate Bill 756—signed by the governor in September—gave the state’s water control board and similar regional boards more authority to investigate cannabis farms regarding water contamination, environmental destruction, deforestation, and contributing to the state’s drought issues.
In 2022, California enacted legislation prohibiting employers from discriminating against employees for using marijuana, which has been legal in the state since 2016. The law, Assembly Bill 2188, to take effect on Jan. 1, 2024, prohibits discrimination “against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person” for using cannabis off the job and away from the workplace.
This year, legislators passed another law making it unlawful for employers to ask employees or applicants about prior cannabis use.
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Brad Jones

Brad Jones

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Brad Jones is an award-winning journalist based in Southern California.

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