Do the Chinese Really Run the Illicit Weed Market in America?

March 30, 2023 · Cannabis.net

A joint law enforcement task force discovered approximately 9,000 pounds of cannabis with an estimated value of nearly $15 million in a suburban neighborhood in Antioch, Calif, just a few days before Christmas. The California Department of Cannabis Control suspected the four houses searched in the bedroom community located 45 minutes outside San Francisco had links to China.

Illegal marijuana production in the United States has long been associated with Mexican cartels, who import, grow and distribute illicit cannabis. However, in recent years, Chinese investors, owners, and workers have emerged as a new funding source and labor for illegal marijuana production.

Huge Funds From Chinese Investors

State law enforcement officials, experts on the international drug trade, economists, and lawmakers have revealed that the number of farms receiving funding from sources that can be traced back to Chinese investors or owners has increased significantly. Chinese owners and workers are now more prominent at illegal grows in California, Oklahoma, and Oregon.

The Oklahoma Bureau of Narcotics has flagged approximately 3,000 out of the state’s nearly 7,000 licensed marijuana farms for suspicious activity in the past year. These farms are currently under investigation for allegedly obtaining licenses through fraudulent means and selling their products on the illicit market, according to Mark Woodward, a spokesperson for the Bureau.

According to the agency, approximately 2,000 farms have ties to China, with the country providing either workers, funding, or both. Mark Woodward, the Oklahoma Bureau of Narcotics spokesperson, stated that of the over 800 farms the agency has closed down for illegal operations in the past two years, about 75 percent have connections to China. Woodward added that he would confidently say that we’ve linked over 600 farms to Chinese investors and organized crime, with some connection back to China.

Law enforcement officials in southern Oregon reported that as many as 20 different nationalities were involved in illegal grows in the area in 2021. However, the increasing amount of Chinese funding and the potential influence of the Chinese Communist Party has raised concerns among legislators and law enforcement experts.

Rep. David Joyce (R-Ohio), a former prosecutor and co-chair of the Congressional Cannabis Caucus, stated to POLITICO that the Chinese Communist Party’s malign influence had been observed recently. Unfortunately, the cannabis industry is not immune to these tactics. Joyce referred to a Chinese surveillance balloon spotted over Montana in early February.He added, “Do we wish to encourage an environment where marijuana cultivation occurs with proper safeguards, or do we continue to ignore the issue and let illegal operations like these thrive?”

Not Much Is Known

There is still a lot of uncertainty surrounding Chinese-funded cannabis cultivation. It’s unclear whether the funding is coming from groups with connections to the Communist Party and how much of the cannabis produced through these grows are sold within the U.S. or exported. The extent of Chinese organized crime syndicates’ involvement in American cannabis cultivation is also unknown. Vanda Felbab-Brown, the director of the Initiative on Nonstate Armed Actors and a senior fellow at the Brookings Institution, stated that the Chinese government has a complex relationship with organized crime.

Although the Chinese Communist Party has a strict stance on drugs, the triads, which operate global crime networks distributing chemicals needed to manufacture methamphetamine and fentanyl, often favor the CCP by functioning as extralegal enforcers for the government, according to Felbab-Brown. The CCP, in turn, usually allows them to continue their operations but does not control them.

Liu Pengyu, a spokesperson for the Chinese embassy in Washington, D.C., stated to POLITICO that the Chinese government has a “zero tolerance” attitude towards drugs and has been actively combating drug production, trafficking, and other drug-related crimes. Liu added that the Chinese government encourages citizens to avoid participating in illegal or criminal activities abroad.

Experts, including Felbab-Brown, have warned that there is still a lot unknown about the potential involvement of Chinese triads in cannabis production. “There are various actors in China who engage in drug trafficking,” Felbab-Brown stated, emphasizing that the same could also be true for drug operations in the U.S., which could involve large-scale organized crime operations and small, family-run businesses. “It’s crucial to exercise caution and thoroughly investigate the motives behind these operations,” she added.

A Booming Illicit Cannabis Market

Illicit cannabis production in the United States is on the rise, with approximately 75 percent of the $100 billion cannabis market in the country remaining illegal. Of that illegal market, around two-thirds of the cannabis is domestically grown. Whitney Economics, a cannabis industry analyst, has provided data on this.

The amount of marijuana seized by the U.S. Border Patrol at the nation’s borders has sharply declined from 582,000 pounds in 2020 to 155,000 pounds in 2022. Mandarin-language ads recruit Chinese workers for illegal growth in Oklahoma, California, and other locations.

Mandarin-language websites and social media apps have been used to recruit Chinese workers for illegal cannabis cultivation across the United States. In California, Chinese triads have been involved in illicit cannabis production for years, with a recent uptick in Chinese funding and actors. Some of the Chinese-funded grows encountered by the Department of Cannabis Control are operated by Chinese triads, but not all.

NBC and Searchlight New Mexico investigations in 2022 and 2020, respectively, revealed that Chinese workers travel to illegal grows in California and New Mexico from other cities after seeing Mandarin-language ads.

According to Woodward, similar ads have attracted workers to illegal grows in Oklahoma. Felbab-Brown commented that the emergence of Chinese funding for illegal cannabis is a new development that challenges the interests of Mexican drug cartels. She noted that it remains to be seen whether this trend will continue and how it will impact the relationship between Chinese and Mexican criminal organizations.

Conclusion

The issue of Chinese funding in the illicit cannabis industry in the United States has raised concerns among lawmakers, law enforcement officials, and experts. While much remains unknown about the extent of Chinese involvement, evidence suggests that Chinese investors and organized crime syndicates are linked to many illegal grows across the country. The situation poses complex questions about drug policy, criminal activity, and international relations and will likely continue to be scrutinized in the coming years. (Full Story)

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