When Colorado started selling weed back in 2014, its government had a plan. The idea was to tax and regulate a product so widely consumed already, squeezing out longtime farmers and distributors in the process. However, the police now claim that legalization has had the opposite effect entirely. The black market is positively thriving, even with the over 500-and-counting legal pot shops dotting the state.
Criminal gangs are growing weed in Colorado and then smuggling it into states that have yet to legalize. This way, they boost their profits. Within state borders, underground business is booming too. This is simply because consumers prefer their trusted dealers of yesteryear, and the high prices that dispensaries ask are unaffordable for most of them.
However, investigators blame this flourishing trade on state cultivation laws being overly kind and difficult to police. As Canada gets ready to legalize it, some industry insiders spoke to CBC News about why they think the illegal industry is doing so well in an era where cannabis is legal, despite every attempt to destroy it.
What the DEA Says
Investigators with the Drug Enforcement Administration, or DEA, an unpopular federal agency, are concentrating on the biggest, most legally offensive drug trafficking operations in the United States. Its supervisor, Paul Roach, claims that marijuana cases take up about 15 percent of his team’s total time, which is three times higher than it was before legalization.
“Colorado has basically become the marijuana capital of the United States,” Roach exclaimed. “You find drug trafficking organizations moving here, setting up shop in Colorado and sending it back to their home states, where they can sell it at incredible profit.” The state’s illegal weed has dozens of states across the country just begging for it.
According to a report by the Rocky Mountain High Intensity Drug Traffic Area, which supports federal strategies for drug control by coordinating the investigations of different authorities, Florida, Illinois and Texas are Colorado’s biggest clients, all scrambling for the quality of its high-altitude pot. Crime gangs, such as Cuban and Mexican cartels, are growing everywhere, in rentals, warehouses, even federal land.
Often, these organizations conduct business out in the open, disguising themselves as legitimate. “The cartels and drug trafficking organizations, in general, will go where they will make money,” Roach explained. “If they see an opportunity in Canada to increase their profits by exploiting Canada’s laws, then I expect them to do that.”
What the Sheriff Says
Jason Mikesell, sheriff of Teller County in Colorado, a rural paradise by the Rocky Mountains, says that criminal groups are moving into this quiet town of 24,000 people just to traffic weed out. The area’s small population consists of young families and retirees. “Never would we have thought that we would have this issue going on in our community,” he stated.
Aware of the local black market, Mikesell claims the majority of illegal cannabis cultivated in the area crosses state lines. Just last fall he listed an SUV for sale on Craigslist. Somebody wanted to trade almost two kilograms of weed for it. He set the swap up and arrested them on arrival for illegal distribution of cannabis. A judge recently convicted one, sending him to jail for four years.
Colorado, Mikesell claims, was the country’s test subject for legalization. He puts the blame on the state for drafting laws that made enforcement impossible, as people can grow so much of their own. Four years ago, at the start of legalization, each adult could cultivate six plants at home. They could also pool them to form a co-operative.
If you were a medical patient, the state permitted you to grow 99 plants, and even claim a caregiver to cultivate it for you. Introduced early this year, stricter regulations now limit each household to a maximum of just 12 plants, so enforcement has become easier for the sheriff’s office. This year so far, his team has bust eight houses and confiscated weed worth more than $3.5 million.
In the same operation, they arrested over 20 members of cartels in both Cuba and Miami. Mikesell claims his people are receiving tips from callers complaining about the overwhelming smell in their neighborhoods. “We know there are another 60 or 70 marijuana houses we have not got to yet,” he said. Residents are complaining across state, about blown transformers and noisy fans too.
What the Dealer Says
Under condition of anonymity, a dealer spoke with CBC News about his life. Most days he spends driving around Denver in his sedan, dangling an air freshener from his rearview mirror and cradling a bag of dank buds on his lap. Despite its sweet aroma, it does little to disguise the pungent smell of herb. He said, “In a good day, I am making $400 to $500.”
He is not alone. Along with many other illegal growers and sellers, he advertises his services online. He does delivery, selling weed he gets from a network of farmers with “extra” product. He grows his own too. Comparing himself to your favorite pizza man, he guarantees delivery within the hour anywhere in Denver. To him, legalization was a godsend.
Business is booming because he services clients who want discretion. “I have had nurses that have contacted me via the Internet for delivery to their home or their office or wherever they feel comfortable,” he explained. Truck drivers are also clients. They do not want to be on any state database, as federal transportation laws prohibit them from consuming cannabis. They could go to jail.
Dealing is not his full-time job. He has a few “respectable” side projects to keep him occupied, but he maintains that he prioritizes making cannabis accessible. He worries about the police, but worries more about other risks associated with the black market. Pointing to his passenger seat, he said, “I have had people sit right there, with a gun to my head. It is a definite risk.”
What the Advocate Says
When Larisa Bolivar wants buds or edibles in Denver, she goes to one of her favored dispensaries. This longtime consumer is president of Colorado’s Cannabis Consumers Coalition. She has been advocating for two years, polling consumers about their weed sources in online surveys. After receiving customer lists from some weed companies and reaching out on its Facebook page, she contacted people directly.
Her 2017 survey had 527 respondents, and while she is still busy adding this year’s results, she believes findings consistent. “There are still a larger percentage of people buying from the black market,” she confirmed. Her results indicate that nearly half of all respondents are not buying from the state’s legal marketplace. They are buying from friends and regular dealers they trust.
You have to be 21-years or older to buy weed legally in Colorado. You even need some I.D. to prove it. Accessibility is a problem. To make matters worse, retail stores are not yet in every community. The state generated more than $250 million just on marijuana taxes last year, but those exact costs, added to the price of weed, are the main reason why the local black trade is so attractive.
The illegal market is simply cheaper. Bolivar reiterates this by saying, “I really think a lot of it has to do with price.” Tax rates are not consistent throughout the state. They vary by municipality. In Denver specifically, recreational consumers are paying a hefty marijuana tax of 23.15 percent. Echoing everybody’s sentiments, Bolivar solved it, “If I can save $5 on a purchase, then that is a cheap lunch.”