This Week in Weed: Expunging pot convictions in LA, and smuggling legal weed into the illicit market

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Some companies are using cannabis licenses to sneak tens of millions of dollars worth of high-grade cannabis onto the streets, says Leafly Senior Editor David Downs. Photo by Shutterstock.

It’s been nearly five years since California voters passed Prop 64, which legalized recreational adult use of cannabis. The state is still ironing out its pot policies and working on marijuana’s legal structure. Leafly Senior Editor David Downs talks about the latest effects of Prop 64.

KCRW: LA District Attorney George Gascon announced nearly 60,000 prior cannabis convictions will be expunged in the county. How big of a deal is it?

David Downs: “It's a huge deal. Millions of people are saddled with cannabis records … and they have altered the life courses of those individuals. So these expungements are necessary and a slow part of undoing the harm of the War on Drugs. 

This ability to clear someone's record probably does more economically to repair the harm ... than many of the other types of programs that are out there. 

A RAND study recently came out and said that broad expungement efforts would have an order of magnitude bigger impact on people's lives than trying to greenlight a few store owners per se. And we're seeing that take place in Los Angeles.”

Why are expungement efforts gaining traction now?

“It's because the momentum of persecution in this country is hard to slow down, stop, and reverse.

It became part of the district attorney's job to enact or not enact various aspects of Prop 64. We've seen an entire political spectrum of district attorneys either embrace the ability to expunge these records and release people from jail … all the way up to counties saying, ‘We don't have the time. We don't have the resources. We can't do this.’ 

And we've seen nonprofits have to move in and say, ‘Here's some technology. Here's the cases you can dismiss. Here's the records you can expunge. Will you please go about and do this?’”

Prop 64 established a legal market. You broke a story about a Bay Area company smuggling tons of legal weed onto the street. Why would someone do that?

“We [have] got to start with demand. United States citizens and residents spend an estimated $60 billion per year on cannabis and most of that is illegal. 

But some of that cannabis comes from legal sources that are [diverted] into the illicit market. These so-called burner distribution licenses seem to be the biggest source of diversion in the biggest legal market in the world, which is California.”

What are burner licenses and why are they so popular?

“In 2018, I first heard of this concept of people using a cannabis distributor’s license — that is a license to take weed from a farm and sell it to a store — and using it like they'd use a burner phone. [That’s] where you use a disposable phone and commit illicit activity with that phone, but then throw that phone away … and move on to the next phone that you know is cleaner and isn't associated with your criminal activity. 

People have been saying that there are licensees that are using those distribution licenses like a burner phone … That's because the distributor license seems to be the easiest license to get both at the state and local level.”

What exactly was this Bay Area company doing?

“A whistleblower familiar with the company's operations told first the local officials in Oakland, and then the state officials, and then Leafly that they were witnessing a burner license operation. 

In effect, they were alleging that this distributor, Blue Tree LLC, was essentially having the cannabis ‘fall off the back of the truck.’ So tens of millions of dollars of legal cannabis that should be at the warehouse that they [report] receiving was not actually moving on further into stores. 

It seems to be that the common practice for these burner licensees is to go around the state buying up a lot of cannabis, but then never selling it into stores. It kind of disappears in the system. This whole thing only works if regulators aren't watching closely, and they appear not to be well.”

If we have a legal market and regulations in place, how is all this pot slipping through the cracks?

Leafly found that in 2020, there [were] over 1,100 distribution licensees in California, but not a single one had their license revoked for any cause … and that was down from 15 license revocations in 2019. It's clear that the enforcement tempo is lacking at the state level, and we're finding a similar picture at the local level.”



Matt Guilhem


Tara Atrian