May 18 2016 02:49 PM

Legalization, crackdowns affect players in the market

Last week, city officials announced a crackdown on unlicensed dispensaries.
Photo by Sebastian Montes
Suddenly, four dispensaries were up and running on the same block of his home near Bankers Hill. Noah (not his real name) was a dealer who had been raking in more than $3,000 per month in 2012 selling pot to a circle of friends and acquaintances but saw those clients flock to the dispensaries that flooded San Diego that year, with their vast array of strains and products.

“Business was going really well, and then I started to lose clients left and right,” Noah said. “It was an ‘Oh fuck’ situation for quite a few months.”

Then, almost as suddenly, city officials started shutting down the hastily opened shops, and Noah’s fortunes reversed yet again.

“Once the dispensaries were being shut down, I started making a lot more money,” he said. “Nobody could figure out where to get weed anymore, and they had grown to be dependent on the dispensaries. So I was seeing more demand than ever.”

Noah’s illegal pot business blossomed into a full-time, $10,000-a-month career thanks to the lessons learned after the onset of medical marijuana, namely, just how mercurial the new cannabis marketplace is, and just how tireless he had to be to compete with the city’s eight licensed dispensaries and the untold more that operate in the legal shadows.

Weed, he realized, doesn’t sell itself.

Noah stands as something of an anomaly in San Diego’s always-shifting marijuana marketplace, a relic of a bygone era as cannabis edges toward legitimacy.

“We never pretended that Prop 215 would do anything about changing the black market,” said Dale Gieringer, coordinator of California NORML, a nonprofit dedicated to reforming cannabis laws. “If you look at the arrest statistics over the long run since 1996, there’s really not been any dramatic impact. It’s been a slow and steady decline in arrests just because of the realignment of law enforcement priorities.”

Crime data show that the occasional pot bust still happens in San Diego. But busts for smaller amounts are now handled as a citation.

For the most part, police focus has turned to producers of butane-based marijuana concentrates and dispensaries that flout city ordinances by skirting not-zoned-for-marijuana distribution.

Nearly 300 such operations in the city have been shut down via civil injunction. After years of cat-and-mouse tactics, San Diego police and the city attorney announced last week that they have begun filing criminal charges against “hardcore” dispensaries that operate without a permit.

Noah and his ilk stand to gain from such a crackdown, but he knows the windfall will pale in comparison to the tumult he’ll face if California voters approve recreational marijuana this fall.

While medical legalization didn’t do much to dissolve the black market, full legalization should deal a massive blow, Gieringer said.

“Does the new legalization scare me? Fuck yeah,” Noah said. “But I know there’s nothing I can do other than keep it going as long as I can. To be able to sustain this over the last seven years—I’m truly blessed. No one else I know has been doing it this long, so I know it’s coming to an end.”


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