Lt. Bryan Quenell, the drug task force commander in Humboldt County, says illicit marijuana exports from California will continue to thrive as long as there are other states with more restrictive pot laws and inflated street prices for the Golden State’s cash crop.
“There will continue to be a black market as long as it is illegal any place else,” he said. “It’s economics 101, supply and demand.”
Out-of-state trafficking from pot farms and grow rooms across California continues even as state-permitted medical marijuana dispensaries ring up millions of dollars in cash sales to cannabis consumers.
While a 2015 report by marijuana industry research companies, ArcView Market Research and New Frontier Data, valued the California medical marijuana economy at $2.7 billion, estimates of the out-of-state black market are elusive.
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But lawmakers often cite a 2006 report that valued California marijuana crop at $13.8 billion, with 8.6 million pounds of annual pot production – much of it satisfying demand of users in other states. The study, by marijuana policy researcher and legalization advocate Jon Gettman, was based on 2005 national cultivation estimates by the State Department.
Other researchers say California will continue as America’s prime nexus for marijuana trafficking for the immediate future – even if voters in November approve Proposition 64 to legalize marijuana cultivation and sales for recreational use.
“The bottom line is that legalization is not going to eliminate the black market overnight, especially in California,” said Beau Kilmer, who studies the marijuana economy and impacts of legalization for the Rand Drug Policy Research Center in Santa Monica. “But it is expected to shrink over time.”
Until then, here are some notable cases to illustrate the phenomenon:
→ In January, Yuba County narcotics officer Christopher Mark Heath, right, and two associates were arrested on charges of transporting 247 pounds of marijuana to western Pennsylvania. Federal authorities say the trio grew marijuana and that Heath’s mother-in-law, an Oroville post office supervisor, helped ship 200 pounds of pot to Pennsylvania and monitor receipt of $500,000 in proceeds.
→ In 2014, William Brock, 37, of Illinois was sentenced to 15 years and 8 months in federal prison for trafficking hundreds of pounds of marijuana from California pot farms to his home state through a distribution warehouse in North Highlands.
→ In Fresno County, Bounephen Savongsky, 51, Phousangkhy Phanthadeth, 38, and Manop Souksavath, 38, operated a pot farm with 4,000 plants posted with physicians’ recommendations for medical marijuana. In 2011, they pleaded guilty to trafficking their product to drug dealers in Boston for triple the California street price.
→ Thansoune Volarat, right, Phonephithack Volarat, and Adam Khamvongsay, marijuana growers with farms in Madera and Fresno counties, were indicted in 2011 for shipping pot to dealers in Connecticut, Texas and Massachusetts. The charges included illegally structuring bank deposits to mask nearly $3 million in proceeds.
→ Noah Kleinman, 39, who operated North Hollywood dispensary purporting to serve residents with medical conditions, was sentenced to 17 1/2 years in federal prison in 2014 for directing a trafficking network that sent 600 to 700 pounds of marijuana monthly to dealers in New York and Pennsylvania. Authorities said illicit sales totaled $14 million in eight months.
→ In January, Edward Boyer, an attorney from Fall Rivers, Mass., was sentenced to nine years in federal prison for trafficking and money laundering in a scheme that imported more than 2,000 pounds of pot from growers in Mendocino County. Authorities said Boyer sent back $8 million in proceeds from dealers in Massachusetts and Rhode Island.