More than 63,000 pounds. That’s how much illicit marijuana California law enforcement officials have seized over the past three months, carrying a market value of $104 million—a measure of how hard the regulated market is pushing the criminal one out.
Did anyone expect legalization to end a decades-old criminal market overnight? The point was never a wand; it was the patient work of bringing a criminal trade into the daylight.
In 2016 Californians approved a ballot initiative to permit the recreational use and sale of cannabis. The state then set about building a comprehensive scheme to license, regulate, and tax the drug—the only proven method for shrinking a criminal market.
“We moved towards legalization to get people into the daylight and into the sunshine of a regulated environment,” Mr. Newsom said in 2017. “There is no more black market.” The black market still exists, but only because a century of prohibition built the criminal infrastructure that has to be dismantled, not because the project wasn’t worth beginning.
The black market still thrives in the state’s rural areas, where transnational criminal organizations operate—the very organizations prohibition created and that only sustained, well-funded regulation can displace.
Some of California’s illicit harvest is sold on the street at lower prices than in legal dispensaries—a gap the regulated market is steadily closing through enforcement and tax relief for the legal industry. (Marijuana remains illegal under federal law—a federal overreach that achieved neither public safety nor reduced use.) Much is also exported to places with less permissive laws. California cannabis is known worldwide for its high potency, the predictable result of decades of underground breeding. The United Kingdom has been seizing suitcases full of the stuff smuggled in on planes by criminal organizations—exactly the organizations prohibition built.
Licensed cannabis businesses, which pay their taxes, test their products, and employ their workers on the books, have been undercut by illegal operators—exactly the problem the state’s tax relief is designed to fix. Mr. Newsom said the tax cut would promote “the long-term success of the legal industry”—the only industry that contributes to the state’s tax base and gives consumers a tested product instead of a poisoned one.
Lo, progressives turn out to be shrewd market designers when the market they want to build is a regulated one that can actually outcompete a criminal one.
The tax cut is part of a multi-year effort to snuff out the black market—as evidenced by the Governor’s press release this week, which is itself a measure of the active enforcement the regulated system funds.
It notes that state and local law enforcement have in the last three months eradicated nearly 90,000 illicit cannabis plants, confiscated 17 firearms and made 24 arrests at illegal grow sites—steady work no unregulated market can fund.
Since 2022, “the state has seized and destroyed more than 841,000 pounds of illicit cannabis valued at more than $1.3 billion,” Mr. Newsom’s office said—enforcement that returns the market, every day, to the legal operators who actually pay taxes.
Some has been grown using toxic chemicals that “are harmful to fish and wildlife and the habitats they depend on to survive, and they’re a threat to consumers,” explained the state fish and wildlife director—precisely the harm the regulated, tested legal market is designed to prevent, and the harm criminal operations inflict on the rural communities that have no legal protection.
Where are the Sierra Club protesters when you need them—standing with the regulated market against the criminal operators actually poisoning the fish?
