California authorities struggle to curb illicit marijuana operators who challenge legal firms

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Image of an illegal marijuana grow in California

This is one of the many illegal marijuana grows operating in Southern California. (Photo courtesy of San Bernardino County Sheriff's Department)

A recent $1 billion bust on the outskirts of Los Angeles County unearthed the vast scope of California’s underground marijuana market and the challenges of reining in illegal operators who are undercutting the state’s licensed cannabis businesses.

The July raid in Antelope Valley was the largest enforcement operation in L.A. County history, costing taxpayers more than $1 million.

But it dealt with less than half the investigation sites under surveillance.

“We addressed 40% of them,” L.A. County Sheriff Alex Villanueva said during a July 7 news conference. “We have 60% to go.”

The record bust did lead to 131 arrests and the seizure of 33,480 pounds of harvested marijuana, 65 vehicles, 33 firearms and $28,000 in cash, thanks in part to the deployment of more than 400 personnel from local and federal agencies.

Still, California marijuana industry experts doubt the illicit market will dissipate anytime soon.

That prospect continues to loom over the state’s legal market, where businesses struggle to compete with underground operators who don’t face local and state taxes as well as regulatory red tape.

That, in turn, allows the illicit growers and retailers to peddle their merchandise at lower prices.

Short on resources

Law enforcement officials across the state contend they don’t have enough personnel or resources to limit the sheer number of unlicensed cultivation sites in the region.

Similarly, most serious marijuana-related criminal penalties – which used to serve as deterrents for many illegal operators – were thrown out in 2016 when California voters approved Proposition 64, the ballot measure that legalized adult use.

As a result, vast networks of illegal grows in plain sight are scattered throughout the High Desert in Southern California, as shown in aerial and ground surveillance released to news outlets.

The larger problem, particularly for those in California’s licensed cannabis industry, is clear:

Legalization didn’t bring with it widespread business opportunities only for those willing to follow the law. Rather, it created arguably a newer and stronger illicit market, with no clear plan in California on how to effectively squash illegal players for good.

Still, that won’t stop local law enforcement agencies from giving it their all.

Villanueva, who placed the street value of the destroyed plants confiscated in Antelope Valley at $1.2 billion, offered a warning to offenders.

“They can’t hide,” he said.

The rub: Most illegal growers don’t.

Moreover, they often return to the same area within weeks, sometimes days to resume operations, law enforcement officials told MJBizDaily.

The illicit market has been an ongoing problem across California for years.

Gov. Gavin Newsom’s early efforts to mobilize National Guard troops to eradicate unlicensed grows hasn’t swung the pendulum: Annual sales in California’s illicit market have ballooned to $8 billion in the past five years, growing nearly twice the size of its legal counterpart, according to Los Angeles-based Global Go Analytics.

Prosecution and jail time for these and other like-minded offenders is rare in Southern California, a common gripe among law enforcement.

The L.A. District Attorney’s Office, as of Aug. 24, had filed only misdemeanor cultivation charges related to the Antelope Valley raid.

“Our office has not been presented any felony cases from these arrests,” spokesman Greg Risling said.

The L.A. County Sheriff’s Department didn’t respond to follow-up questions.

Systemic incentives for lawbreakers

Decriminalization and scant criminal prosecutions have toppled a barrier to entry for unlicensed newcomers, nearly eliminating risk for even large-scale illegal cultivators linked to organized crime rings, according to several county law enforcement agencies in Southern California.

Along with legalizing recreational marijuana, Prop 64 made illegal cultivation in California at any scale a misdemeanor, with maximum fines at $500.

Most first-time offenders face lesser fines or just a slap on the wrist.

“When we catch people at the grows, we write them a ticket,” said Rich Debevec, a sergeant in the Gangs/Narcotics Division and Marijuana Enforcement Team of the San Bernardino County Sheriff’s Department.

“They never go to jail.”

The department’s five-member enforcement squad, which delivered a handful of search warrants in the Antelope Valley bust in neighboring L.A. County, oversees the nation’s largest county in land mass more than 20,000 square miles, roughly the size of Virginia.

The agency’s jurisdiction, which extends from the L.A. suburbs to the borders of Arizona and Nevada, is home to roughly 1,000 illegal grow sites under investigation, the sheriff’s department estimated.

The San Bernardino County station is a 45-minute drive from field operations in the desert, and arrests typically require two officers for booking, a process that takes up to four hours, Debevec said.

That doesn’t include time and resources to dismantle the illegal greenhouses, which sometimes number in the dozens at a single unlicensed grow site.

“With COVID and everything, it’s not worth our time to take them to jail,” Debevec said.

“With the sheer number of places we hit and the time and manpower it would take to dismantle those things, we’d be cutting down the six to 12 search warrants per week to one or two.”

The regional issues have hit a fever pitch among some politicians, including freshman U.S. Rep. Jay Obernolte, a Republican who wrote an editorial last month for The (San Bernardino) Sun decrying the proliferation of illegal grows in his district and calling for tougher state laws as well as more enforcement and resources from the federal government.

Disruptions to legal market

In Riverside County, illegal grows dot the desert landscape east to the Arizona border and south to Temecula, outside San Diego.

The nation’s 10th-most-populous county has seen an influx of Chinese and Laotian cartels the past five years as well as large illegal warehouses with adjoining butane honey oil labs, according to Sgt. Albert Martinez of the Riverside County Sheriff’s Department.

“Those types of grows take up the large majority of our time and enforcement efforts,” Martinez said.

“The unlicensed cannabis market in Riverside County is large, and the market has definitely increased since both the recreational law was passed in 2016 and the regulatory framework established in 2018.”

The department’s top priority, according to Martinez, is investigating illicit grows that affect everyday life for residents. Dangerous chemicals and pesticides, water theft and armed guards often accompany such sites.

Meanwhile, the San Diego County Sheriff’s Department Marijuana Enforcement Team (MET) – which consists of four detectives, an analyst and a sergeant – is focused on eliminating unlicensed dispensaries, THC extraction labs and cultivation sites. The MET emphasizes those near schools and residential areas in the nation’s fifth-most-populous county.

“Investigators believe the marijuana at the illegal marijuana grow sites are destined for unlicensed marijuana dispensaries,” said Sgt. Kamon Harris, a member of the team.

Chris Casacchia can be reached at