LOS ANGELES (AP) — As California enters its fifth year of broad legal marijuana sales, industry insiders say the practice of working simultaneously in the legal and illicit markets is all too commonplace in the struggling pot economy.
Legal businesses have long complained that heavy taxes and regulation — paired with thriving illegal sales — make it impossible for licensed shops to turn a profit.
To survive, an increasing number of license holders are secretly operating in the underground — working both sides of the marketplace to make ends meet.
The AP reports, the state requires legal businesses to report what they grow and ship, and it’s entered into a vast computerized tracking system — known as “seed to sale” monitoring — that’s far from airtight. For the California grower, the furtive illegal sales happen informally, often with a friend within the tight-knit cannabis community calling to make a buy.
Leading companies recently warned Democratic Gov. Gavin Newsom the legal market could collapse. Newsom says he's open to changes.