Another California Cannabis Enforcement Program That Won’t Work

01 Sep Another California Cannabis Enforcement Program That Won’t Work

Earlier this week, California’s Attorney General Rob Bonta announced yet another cannabis enforcement program: the Cannabis Administrative Prosecutor Program (CAPP). CAPP is the newest of California’s ever-growing list of acronym enforcement programs, alongside EPIC (previously CAMP), UCETF, alongside countless other county and local agencies. Will the new enforcement program make a dent in the illegal market? If history tells us anything, the answer is no. And it’ll probably cost a whole lot to boot.

If you’re not familiar with how bad things are for California’s legal cannabis industry, I highly suggest you read my July 10, 2023 post “California Gives Up on the Illegal Cannabis Market.” Essentially, the illegal market may be 2-3x larger (or larger still) than the legal one. You would think that this would make enforcement easy, but you’d be wrong. In spite of all these fancily named enforcement programs, the state served a whopping 92 search warrants in Q2 2023, up from just 21 the quarter prior. That’s not a joke.

So now back to CAPP and why it probably won’t work. CAPP allows cities (Fresno will be the first) to use California’s Department of Justice (DOJ) essentially as backup in enforcement efforts. According to Bonta’s press release:

DOJ, through its Cannabis Control Section, will provide the following support to the city of Fresno, and other local jurisdictions who sign onto the CAPP program to address illegal cultivation by:

• Provide attorneys to act as administrative prosecutors before local administrative hearing bodies or officers and, where necessary, assist with the development of procedures for expedited administrative enforcement.
• Assist with investigative services through the EPIC program and its partnerships with other agencies.
• If necessary, perform the administrative work necessary to provide notices, including assisting in facilitating administrative procedures, and assisting with logistical issues through the use of private process servers, contract code compliance officers, and abatement contractors.

I have to say, this is a relatively creative solution to help cities. Most cities are not Los Angeles or San Francisco or San Diego. Most cities don’t have the resources to go after cannabis criminals, with everything else going on. So allowing cities to tap into the state’s much bigger resources seems – at least on paper – to solve that problem.

However, for the enforcement program to do much, you’d need participation from virtually all of the cities. Let’s say that Fresno (the test case) uses CAPP to shut down all illegal businesses within city limits (which realistically just isn’t going to happen). The illegal businesses will just move to the neighboring city and deliver into Fresno. Problem not solved.

Imagine, on the other hand, that every city in the state signed onto CAPP in a unified effort to eradicate the illegal market. DOJ would be completely overwhelmed and wouldn’t be able to allocate enough resources. With thousands and thousands of illegal businesses, you’d need an army of lawyers to prosecute them all. And the state doesn’t have them.

Moreover, it looks like the enforcement program has some overly aspirational funding goals. According to Bonta:

The program is designed to be self-funded as DOJ staff, in coordination with the local government, will seek to recover costs through fines, enforcement actions, stipulated administrative orders, settlements, and abatement liens. Any funding received that exceeds the cost of services provided as part of this MOU will be held by the city of Fresno.

In other words, DOJ believes that fines raised through enforcement actions will pay for the actions. Any time the government says a program will be self-funded, I become 20 times more skeptical. It almost never works out that way. In fact, Willamette Week just reported that Oregon’s purportedly self-funded psilocybin program will now need taxpayer support.

The same thing will happen here. Even assuming lots of cities sign on, a huge proportion of defendants will simply skip town, default, or not pay their fines. It will be an impossible task to recover funds sufficient to fund the program. Maybe that’s why Bonta’s press release said that the program “is designed” to be self-funded rather than that “it will” be. And when that self-funding doesn’t work out, taxpayers will be left with the bill.

Will CAPP help smaller participating cities go after some of the more brazen illegal operators within their borders? Probably. Will it solve the illegal market? Absolutely not.

Enforcement will never end the illegal market. In fact, it won’t even put a meaningful dent in the market. This should be extremely obvious, yet it seems like the folks in charge cannot see what’s right in front of their eyes.

As I have said before, police actions did not work for decades under the Controlled Substances Act, so why would they work when the laws are even more permissive? If the state really wants a healthy legal industry, it needs to deregulate things that make no sense. And there is a lot that makes no sense. Unless illegal market operators are incentivized to come into the legal market — and you can bet a couple of search warrants here and there isn’t going to do that — nothing will change.