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The Black Market For Pot Is Still Thriving In California (HBO)

The Black Market For Pot Is Still Thriving In California (HBO)

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Recreational marijuana became legal in California in January. But for small-scale veteran growers like Jason Fleming, licensing backlog may shut his business down before he sells a single nug on California’s new legal market.

The state already had a 22 year old medical marijuana industry that outlined a legal route for patients to purchase pot from licensed dispensaries, but left the path for the weed to the shops in what can only be described as a very, very, gray area. The Medical and Adult Use Cannabis Regulation and Safety Act changed all of that — now all growers have to be licensed, and their wares need to be tested in a lab.

“We want to make sure that people are getting safe cannabis, that when they come to a licensed retail store. they know it’s safe to consume,” says Lori Ajax, Chief of the Bureau of Cannabis Control, which regulates distributors. Growers and consumers also pay new state and local taxes that can get as high as 45%.

Despite the significantly higher overhead, Fleming is determined to make it in the new, legal marketplace. He’s complied with licensing law by purchasing a growhouse for $25,000 a month, and filled out all of his paperwork. But Sonoma County has kept him waiting for local approval for six months. Without that, he cannot begin growing, so there’s no money to be made.

“If this keeps continuing then we're going to have to operate this place as a black market grow to continue to pay for the legal grow,” Fleming told VICE News.

Richard Parrott is the Chief of CalCannabis, the state agency that licenses medical and recreational cultivators, is familiar with stories like Jason’s. He told VICE News that he had heard of backlogs of applications with local authorities, but there wasn’t much he could do about it. “The state doesn't have any purview over the locals,” he said.

To stay afloat, Jason can use his growhouses that are already up and running to sell to medical dispensaries. He can also sell some of his product at seshes, a type of underground marketplace that operates in the last remaining gray areas of the state’s medical marijuana laws.

But the costs of getting his business off the ground demand more than a flimsy financial life vest. As time passes, an emerging black market fueled by consumers who can’t bear the brunt of the new taxes has come knocking.


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