China’s Growing Illegal Pot Industry in the US Should Spark Action

China’s Growing Illegal Pot Industry in the US Should Spark Action

Top political leaders are wise to demand more information and stop the spread of these illegal operations.

The link between the Chinese government and fentanyl is widely known. Using Mexican producers, international drug cartels linked to the Chinese government are laundering money and trafficking deadly drugs — and killing Americans at a record rate. But there’s another drug of interest to the Chinese, and exposing it is gaining immediate and unique bipartisan concern in Washington: today’s highly potent marijuana. A bipartisan letter sent to the attorney general by more than 50 members of Congress in the House and Senate rightly raises the alarm about the Chinese government’s active involvement in illicit marijuana.

It appears that in legal-marijuana states, Chinese organizations are exploiting weak regulations to cultivate marijuana and produce illicit THC drugs, at the expense of Americans.

Maine, where voters legalized commercial marijuana in 2016, has become a hotbed. A July 2023 memo from the U.S. Department of Homeland Security noted there were 270 properties in the state — producing more than $4 billion in revenue — being used by Chinese organizations. A February 2024 investigation by the Maine Wire “identified more than 200 properties in rural Maine that were purchased by Chinese out-of-staters since 2020 and now appear to be operating as illegal marijuana grows.”

This issue is not unique to Maine. The Oregon-Idaho High Intensity Drug Trafficking Area program, a coalition of law-enforcement agencies, reported that transnational criminal organizations “connected to China have increased their presence in large-scale marijuana cultivation and export.” Similar operations are taking place in Oklahoma and California.

Highlighting one investigation, the Oregon-Idaho HIDTA explained, “20 properties associated with the [drug trafficking organization] along with various bank accounts and Chinese-food restaurants were identified as being used to facilitate the laundering of illicit proceeds acquired through illegal sales of marijuana. The organization utilized . . . various business accounts before diverting the funds back to China disguised as an international business transaction.”

Chinese-government-backed criminals produce illegal marijuana, sell it to Americans, and then send the proceeds back to China, where they can easily be funneled to other illegal activities such as fentanyl and cyber activities, creating a burgeoning national-security threat.

These illicit grow operations, which are often heavily guarded, are an existential threat. They also are a threat to public safety as they compete with rival growers, such as Mexican cartels.

The expansion of the illicit market, together with the involvement of one of America’s greatest strategic adversaries, highlights a broken promise of legalization. Proponents assured skeptical voters that THC drug legalization would displace the illicit market for marijuana. But the opposite is occurring. These illegal Chinese-government-backed operations are popping up in states where marijuana is at least “medicinally” legalized and normalized — not in rural states such as Wyoming, Nebraska, or Kansas that have not liberalized their drug laws.

In fact, Oklahoma voters rejected full commercialization in part because of the proliferation of illicit grows fueled by the state’s medical market.

Perhaps counterintuitively, marijuana legalization provides cover for the expansion of illicit actors’ operations. While an illicit marijuana grow would stand out in a state like Wyoming, it blends in alongside licensed facilities in California.

The involvement of Chinese drug-trafficking organizations was almost inevitable. Given that Mexican cartels have successfully moved their illicit grows to American soil, Chinese cartels have realized they could, too. Bulgarian individuals were also reported to be involved in operations. The illicit market for marijuana is booming for foreign nationals who are tied to American citizens involved in the illicit drug trade.

Policy-makers are waking up to the harms of illicit THC drugs and marijuana and the broken promises of legalization. In January 2024, leaders of the House Committee on Homeland Security sent a letter to Secretary of Homeland Security Alejandro Mayorkas and DEA Administrator Anne Milgram about similar issues. Last week’s letter was just the latest in a series, which includes a previous letter from Maine’s congressional delegation.

Swift action is needed. An investigation in Oregon that tracked money laundering from marijuana grows through Chinese restaurants and back to China involved the Drug Enforcement Administration (DEA), Internal Revenue Service, U.S. Customs and Border Protection, and Homeland Security Investigations as well as state and county law-enforcement agencies. While successful, the investigation took two years. In the time it takes to gather the evidence needed to shut down one illegal marijuana operation, many more can pop up — and that appears to be exactly what’s happening across the nation.

It’s rare for people in Washington to agree on anything these days. Top political leaders are wise to demand more information and stop the spread of these illegal operations. Americans should take note of China’s keen interest in more Americans using more harmful drugs.

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Region: United States

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