Federal marijuana prohibition is costing state-legal cannabis companies millions of dollars, as Border Patrol units have ramped up their harassment of state-legal commerce in California this summer.
“They’ve intimidated my employees and cost me a lot of money.”
On July 1, officials at Infinite Chemical Analysis Labs (Infinite CAL), a state-licensed San Diego cannabis lab, went public with their complaints of federal harassment after Border Patrol agents seized the lab’s legal hemp samples at an immigration checkpoint many miles from the border. Infinite CAL’s driver was stopped, searched, and threatened with arrest. Josh Swider, Infinite CAL director, told Leafly it was their fourth Border Patrol seizure since March.
“They’ve intimidated my employees and cost me a lot of money,” Swider said.
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Legal conflicts simmering at border
Infinite CAL has learned what immigration law experts have been noting for years: People and companies are getting chewed up in the conflict between federal and state laws at the border.
Cannabis is legal in 11 US states, and medical marijuana is legal in 35. Canada has full federal legalization. Meanwhile, the US government deems weed equivalent to heroin and treats it accordingly.
Most severely, marijuana use by a non-citizen can lead to deportation, visa revocation, denial of entry to the US, and rejection of an application for citizenship. You can legally own stock in a Canadian cannabis company, but the CEO of that company could be legally barred from US entry.
More commonly, US citizens traveling within the country will get stopped and their car sniffed by a drug dog. If the canine alerts, the driver is detained, their state-legal cannabis seized, and threats issued. US citizens have also lost border privileges, like SENTRI passes, if caught with small amounts of state-legal marijuana.
Legal since 2016, California’s multi-billion-dollar cannabis sector now regularly interacts in-state with federal Border Patrol units, with varying results.
According to the Los Angeles Times, in July the cannabis distributor Movocan lost $15,000 at a Border Patrol highway checkpoint 20 miles from the border.
The licensed vape maker Platinum Vape lost $60,000 in product to the Border Patrol in November.
Even hemp erroneously interdicted
The Border Patrol’s job duties include keeping illegal drugs, drug users, and drug traffickers out of the United States. Backstopping the border line, Customs and Border Protection runs nine interior California checkpoints, located up to 63 miles from the California-Mexico border.
Customs officials can legally stop US citizens within 100 miles of any international border, questioning rural residents, daily commuters, and even school children. Two in three Americans live in this red zone. Friction at the checkpoints is almost guaranteed.
“These businesses are now being deprived of an essential service required to get their products to market.”
In April, Infinite CAL managed to lose a federally legal hemp crop from the grower Primordia at a notorious checkpoint on Interstate 8, which runs east-west not far from the California-Mexico border. The Infinite CAL driver had his paperwork in order. The hemp was labeled and locked according to state regulations. But he still got stopped, searched, and threatened with arrest, Swider said.
Customs and Border Protection Supervisory Agent Jeff Stephenson told the LA Times that enforcement is complicated in California, and Border Patrol officers are doing their best.
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Lots of legal weed does get waved through checkpoints, according to the Times, and Swider.
But since COVID-19, interior checkpoints have increased, and the uncertainty has distributors avoiding border routes altogether.
Infinite CAL has stopped offering cannabis lab testing to companies in east Imperial County, which shares a border with Mexico.
“We’ve never had this problem,” Swider told Leafly. “We’ve been doing this for years and [recently] had to stop.”
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“Despite obtaining the correct licensing and paying local, state, and federal taxes in order to operate our businesses within the state of California, these businesses are now being deprived of an essential service required to get their products to market,” Swider wrote in a July 9 column for Cannabis Business Executive. Border Patrol harassment is undermining California’s transition to a legal, regulated market by cutting off the link between labs and manufacturers, “keeping them from testing product for public safety and consumer well-being,” Swider wrote.
The legal conflict also threatens cannabis jobs in areas where employment can be hard to come by, he said.
“You wouldn’t assume you would have a problem living in California and transferring cannabis in California when you’re following all the rules. Yet now someone who’s spent millions of dollars opening up companies can’t get stuff out and you can’t get stuff in,” he said.
Angel Fernandez, director of the distributor Movocan told the Voice of San Diego in June that he is out millions of dollars in business. “We have missed on a lot of revenue because it’s uncertain that our cannabis product will make it out of the county.”
To avoid checkpoint hassles, Platinum Vapes has stopped transporting licensed products east-to-west along the few highways in the sparse Southern California desert.
Federal fix needed
California’s Bureau of Cannabis Control cannot force federal officials to stop harassing legal cannabis companies.
And the Border Patrol can’t stop itself, according to the agency’s public statements.
“The Bureau does not have the authority to change the federal law or border patrol checkpoint operations to allow licensees to transport cannabis goods through these checkpoints,” an agency spokesperson told the Times.
Only an act of Congress can exempt state-legal cannabis and business from the Controlled Substances Act, said Nate Bradley, longtime cannabis lobbyist and executive director of the Cannabis Consumer Policy Council, based in California.
The CCPC is working to register voters, offer local cannabis voter guides, and spark the vote this fall.
“This is just another example of the federal government treating cannabis consumers and industry as second-class citizens,” Bradley said. “This is going to keep happening until Congress acts to allow regulated cannabis. This won’t stop.”