Union City, California authorities reported seizing over fifteen thousand cannabis plants last week. With an estimated street value of $27.5 million, the plants were found in 20 grow rooms around the San Francisco Bay area.
Acting on an anonymous tip, law enforcement also confiscated $22,000 in cash, grow equipment, and a bank account with over two hundred in fifty thousand dollars, according to San Francisco CBS 4. No more details on the arrests were available.
California has struggled to bring the illicit market under control since adult-use cannabis passed in 2016. According to a 2018 Marijuana Business Daily report, one in five Californians said they had purchased cannabis on the unregulated market within the previous three months. 84 percent of those said they were likely to buy from the illicit market in the future. The authors surmised only a five percent drop in cannabis taxes in California would bring in an additional 23 percent more legal cannabis customers. Experts believe high cannabis taxes, so-called “cannabis deserts,” and the low number of retail licensees contributed to the high number of Californians not participating in legal cannabis.
According to the Union City website, the City Council passed a resolution in November 2017 allowing three licenses each in the categories of cultivation, manufacturing, distribution, testing, and medical dispensaries. Today, the city has two commercial cannabis licensees who hold permits for cultivation, manufacturing, and distribution/retail.
In 2018, Union City passed Measure DD, placing a $12 per sq/ft tax on cannabis cultivation businesses and a 6% tax on gross receipts for “other” businesses. In January 2020, the state raised cannabis taxes across the board. These increases in taxes raise prices for consumers, making it harder for the legal market to compete with the well-established illicit market, industry leaders say.
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