Illegal pot producers and sellers have found a champion in U.S. Attorney General Jeff Sessions: If Sessions gets his way, he could be refueling their business and refilling their bank accounts.
For Nevada, whose residents and visitors have produced an estimated 1 million unique legal purchases since the recreation program began July 1, a possible Sessions-inspired crackdown on legal dispensaries means losing revenue brought into state coffers. It also means a re-emergence of illegal dealers as the only option for pot consumers, said Riana Durrett, executive director of the Nevada Dispensary Association.
“Lots of money is being made by (black market dealers),” Durrett said. “And they’d make even more without our legal industry.”
While the dispensary association, the Nevada Department of Taxation and Metro Police don’t have concrete numbers on black market sales, a 2015 White House report estimated 40 percent of the $100 billion Americans spend on illegal drugs each year was used on weed.
The illegal operations benefit from criminal drug trade from as close as Humboldt County or as far as Mexico. Farmers in the cartel-heavy Sinaloa state told The Washington Post in 2014 that legalization of pot in the U.S. made growing and shipping illegal marijuana “not worth it,” as wholesale prices fell from about $45 per pound to less than $12.
The FBI said the seizure of marijuana at the U.S. border with Mexico dropped to a four-year low of 1.5 million pounds in 2016, falling to nearly a third of the peak of 3.8 million pounds seized in 2009.
A possible federal crackdown presents another risk to Nevada buyers in the safety of both the buying experience and the quality product. Instead of shopping for highly regulated and tested marijuana products from licensed dispensaries, pot purchases would again come from the street corner, nightclub or a local dealer’s residence or vehicle.
Illegal pot is also free of state-mandated laboratory testing, meaning the quality is unpredictable.
“Even many black-market buyers moved to the legal industry because the marijuana is tested,” Durrett said.
An illegal dealer we will call “Joe” is one such Las Vegan who could benefit from a federal marijuana crackdown. Joe was once a thriving black market entrepreneur who distributed dozens of marijuana bags a week from the northwest valley to locals and tourists alike.
Operating on digital marketplaces from Craigslist to Instagram, Whisper and even gay dating app Grindr to market his product, he also thrived by word of mouth for local buyers.
Joe, 28, declined to say whether he had ties to any gangs, but he offered that gangs, marijuana and cartel connections are “usually one in the same.”
“If you market it the right way and get that exposure, you can do well,” Joe said. “It was a good life.”
Joe’s clientele slipped from nearly 30 to single digits in July 2017 when recreational marijuana sales began in Nevada. His income has decreased so drastically that he has recently started looking for a part-time job.
While weed is legal in many states now, including Nevada, federal law still considers it a crime.
Sessions on Jan. 4 rescinded Obama-era Department of Justice rules that protected states’ rights to operate legal weed industries under conditions that marijuana wouldn’t fall into the hands of minors, criminals and those driving motor vehicles.
Now, DOJ officials have one less obstacle in their way of shutting down legal marijuana. Sessions in a Jan. 4 letter to U.S. attorneys in pot-legal states directed them to follow pre-Obama-era policy to prosecute laws regarding marijuana, which he described as “a dangerous drug.”
Sessions’ directive in Nevada falls in the hands of interim U.S. Attorney Dayle Elieson, who was appointed on Jan. 5 to replace interim U.S. Attorney Stephen Myhre. Elieson’s office declined comment through a spokeswoman.
Another Las Vegas area black market pot dealer said he hoped new marijuana users who tried pot while it was legal in Nevada could mean additional clientele for his illegal businesses. That’s adding to the former customers he’d also expect to return.
In the event of a federal crackdown the dealer said, “I’d let (customers) know I’m still around. They know where to find me.”
Both illegal dealers indicated they sold most flower at $30 to $50 per eighth of an ounce. They said they would not expect their prices to change. Most dispensaries offer recreational eighths from $45 to $70 after tax.
UNLV law professor David Orentlicher, who has studied marijuana law for more than a decade, said in the most likely scenario federal agents would first shut down state-sanctioned recreational marijuana outlets before going after medical marijuana businesses. Either scenario would help the black market re-emerge as a primary source for pot buyers, he said.
“A lot will depend on how aggressive the feds are and whether they choose to prosecute large-scale,” Orentlicher said. “But there’s clearly going to be a change.”
Special Agent Melvin Patterson of the U.S. Drug Enforcement Administration said raids of marijuana businesses would include a detailed process of conducting a background check on owners, running surveillance videos at their businesses and homes and obtaining a search warrant. With enough probable cause, federal agents would then raid the marijuana facilities, seize the inventory and arrest those involved in the business.
But DEA spokeswoman Barbara Carreno added any prospective federal raids “will take a while to sort out.”
If and when that happens, cartels, gangs and dealers — not regulated dispensaries — will be Nevada’s source for marijuana.
“I just hope I have enough for everybody coming back,” Joe said.
Editor’s note: Brian Greenspun, the CEO, publisher and editor of the Las Vegas Sun, has an ownership interest in Essence Cannabis Dispensary.