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San Diego County's Black Market Is Thriving Alongside Its Green Market

By Rick Schettino
Jan 31, 2018

San Diego is doing brisk business during its first month of legal recreational marijuana sales. That’s the good news. The bad news is that illegal recreational marijuana is thriving as well.

According to a report in The San Diego Tribune, recreational marijuana sales have far exceeded expectations in California’s southernmost major city.

Although sales figures have not been officially reported, The Union-Tribune spoke with seven marijuana stores around San Diego County who say legal marijuana sales have been going strong since they began January 1st.

Urbn Leaf, in Bay Park, is estimated to have sold more than $1.5 million worth of cannabis products in January. The company has gone from 55 employees in December to 220 by the end of January, roughly half of whom are delivery drivers, according to the report. Meanwhile, Mankind Cooperative in Miramar has been serving up to 1,000 customers each day, many of whom are reportedly tourists.

Ruthie Edelson, Marketing Director for Torrey Holistics in Sorrento Valley told the UT, “We still have lines of customers that begin about noon and which last on-and-off into the afternoon.”

So who are all these customers? Retailers say there has been a surge in older customers, some of whom wish to use it to treat medical conditions.

“A lot of people who are in their 50s, 60s, and 70s who used to consume are coming back into the market now that cannabis is legal recreationally,” Senn claims. “We had four people in their 80s come here yesterday on the shuttle bus that we operate between the store and Ocean Beach.”

In towns with retail bans, the black market is thriving

Things aren’t rosy all over San Diego County. The County Board of Supervisors voted last year to ban cannabis dispensaries and farms in unincorporated communities such as Spring Valley, Casa de Oro, and Lakeside. (Four dispensaries in these areas were already legally permitted to sell medical marijuana before the ban and are licensed up until April of 2022.)

According to a county spokeswoman, there are at least 38 known illegal dispensaries, all of which received cease-and-desist letters from the Sheriff’s Department Last year.

According to Voice of San Diego, one stretch of Troy Street in Spring Valley, dubbed the Green Mile, has four illegal dispensaries. Each has a green cross painted on the storefront. At night, the dispensaries’ storefronts are lit up with green lights.

Tina Carlson, the executive director of the Spring Valley Chamber of Commerce, claims the situation is out of control. She told The Voice, “I get more complaints on marijuana dispensaries than you would believe — emails and phone calls daily. The dispensaries here are relentless. I have seen one dispensary on Dale Avenue in Spring Valley get raided, shut down and then reopen four hours later. It’s like an open wound. They close it and then it’s open and bleeding again.”

There are currently 14 active investigations in Spring Valley and Casa de Oro, according to the report. Four illegal dispensaries were raided in January, and two of those have already reopened. Apparently, because of the massive amounts of money involved, the maximum $50,000 fine isn’t turning out to be much of a deterrent.

County Supervisor Dianne Jacob, whose district includes Spring Valley and Casa de Oro, said she believes enforcement of the ban will eventually be successful. In a statement, she wrote, “My expectation is that the Sheriff’s Department and county staff will continue to crack down on any fly-by-night operations as they pop up. The county has enacted a ban on dispensaries and they have no place in Casa de Oro or any other unincorporated community.”

Was San Diego prepared for Jan. 1 RMJ launch?

In an editorial in the San Diego Union-Tribune penned by The San Diego Union-Tribune Editorial Board, and published in early January, the paper praised Mayor Kevin Faulconer’s administration and the City Council for preparing San Diego well for the January 1st launch of legal cannabis.

Below is an excerpt from that editorial:

The city was the only local government in San Diego County where recreational marijuana was available for sale on Jan. 1, and some people stood in line Monday morning as if it were Black Friday.

State voters cleared the way for this era by approving Proposition 64 in November 2016, allowing Californians to use cannabis and to grow small amounts at home. The measure included provisions allowing local governments to continue to ban marijuana sales or cultivation or both, and more than 70 percent of counties and cities took this option.

Of the local governments that chose to honor the spirit of Proposition 64 and allow recreational marijuana use, some were simply unable to get their acts together the way San Diego did. For the most obvious examples, Los Angeles and San Francisco still hadn’t gotten around to authorizing pot shops to get state licenses by New Year’s Day, when the proposition took effect. For its part, the state government still hasn’t figured out a way to get the marijuana industry access to banking, which is crucial to minimizing pot-related crime and corruption.

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