It’s never been easier to buy California weed in New York.
Pot stores across New York City are filled with cannabis grown in California, according to SFGATE interviews and other press reports. There’s just one problem — it’s illegal to sell California pot in New York.
New York legalized cannabis in 2021, however, the state has struggled to open recreational pot stores — there were only four legal pot stores in Manhattan as of last week. Illegal pot stores have flooded the state in the absence of legal retailers, and these stores are “absolutely” selling pot that appears to be coming from California, according to Matt Karnes, a cannabis industry analyst who lives in New York.
“I have also seen ‘Made in California’ on some products,” Karnes said in an email to SFGATE.
Karnes isn’t the only person who has noticed California weed on the shelves of these illegal New York dispensaries. A cannabis executive recently quoted in Green Market Report estimated that 99% of the pot sold in the city’s illegal dispensaries had California labels on it.
Cannabis is legal in both New York and California, but it’s against the law to ship it between the states. But California currently has too much pot while New York doesn’t have enough, creating conditions ripe for this cross-country cannabis trade.
Industry experts told SFGATE that New York is getting weed from two different types of California sources: some pot grown on legal California pot farms is being sent to New York, while other weed grown at illegal farms is being labeled with forged packaging to make it appear to be a regulated California product.
David Hafner, a spokesperson for the California Department of Cannabis Control, said the agency “continues to work to combat this illicit activity.”
“The Department believes much of the illegal cannabis that is grown in California is sent to other states. Further, there is a fair amount of illegally cultivated cannabis that is being marketed with counterfeit packaging meant to suggest it is a licensed California product, despite the fact that the product is unlicensed,” Hafner said in an email.
Wesley Hein, a board member of the California Cannabis Manufacturers Association, said it’s easy to buy counterfeit packaging in Los Angeles or on the internet. This counterfeit packaging became popular in 2018, he said, when shoppers couldn’t find their preferred brands in California’s new recreational market.
“It was a perfect storm so counterfeits, which didn’t really exist [before 2018], became big. And … counterfeits have just flooded the country,” Hein told SFGATE.
Karnes said that New Yorkers clearly have an appetite for California’s cannabis regardless of how it’s getting to the Big Apple.
“I can tell you that CA weed does have appeal to the East Coast consumer,” Karnes told SFGATE.
‘The risk is well worth the reward’
Twenty-one states have legalized recreational pot in the United States, giving adults over 21 the right to buy cannabis inside their state borders. But the federal government has never legalized weed and the Department of Justice has told state governments that they need to keep legal weed from crossing state lines.
California, like most states with legal weed, has spent millions of dollars creating a cannabis tracking system in an attempt to comply with the federal government’s directive. Legal companies are required to track every single gram of legal weed in this database as it moves from growing on a pot plant to being sold in a retail store.
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But companies have been found routinely bypassing this tracking system in order to sell outside of the legal system, according to Adam Spiker, a cannabis consultant based in Los Angeles. California’s Proposition 64, which legalized pot in 2016, reduced criminal penalties for illegal cannabis activities in an effort to end the war on drugs — the maximum penalty for illegally selling cannabis is a misdemeanor with no more than six months in jail. Spiker said he supports these social justice initiatives but also said the law created a system that does not have enough penalties to keep people from breaking the law.
“We don’t have much deterrence against illicit activity so people aren’t afraid to keep doing it,” Spiker said. “No one is worried about getting caught. The risk is well worth the reward.”
Hafner, the DCC spokesperson, said that anyone exporting cannabis is risking “criminal prosecution and civil penalties.”
New York has larger criminal penalties for illegal cannabis sales — selling more than a pound of cannabis carries a felony charge and up to 15 years in jail. But authorities have been slow to shut down New York City’s illegal pot shops or prosecute people illegally selling weed.
How does California pot get to New York?
California has been in the business of illegally exporting cannabis across the country for decades. A 2021 report from UC Davis researchers estimated that as much as 80% of the pot grown in California in 2019 was illegally shipped across the country. And those supply routes have not faded overnight, according to Hein.
“California [cannabis] flower has [historically] gone to Ohio and Florida and all over the country. Those supply chains were established and have never really diminished,” Hein said.
Drug traffickers have been caught carrying cannabis through many different routes, including mailing cannabis, driving it across the country and flying with pot.
What are ‘burner distros’?
California’s illegal pot exports have long been blamed on the state’s “burner distro” problem. These illegal distribution companies purchase cannabis from legal pot farms and then divert the products out of the legal market to make money selling it on the illicit market. A WeedWeek investigation last year found that pot products sold in New York were labeled with state tracking identification, implying that they were legal products that had been diverted out of California.
These distribution companies get their names from the “burner phones” that are used to commit illegal activity and then thrown out. Just like those phones, operators at these distribution companies funnel millions of pounds of pot out of the legal system and then shut down their businesses as soon as California’s government investigates them, according to a lawsuit filed last year that accuses the Department of Cannabis Control of turning “a blind eye” to the practice.
H/T: www.sfgate.com
