‘$250,000 cash in a brown paper bag.’ How legal weed unleashed corruption in California
In the San Gabriel Valley, a city councilman demanded bribes from businesses seeking cannabis licenses, according to a source cooperating with the FBI.
In another small L.A. County city, a cannabis industry group offered $15,000 to council candidates who would pledge to support changes to city regulations that weed businesses wanted — an exchange one legal expert said “flirted at the edges” of the law.
And in rural Northern California, an elected official pushed to expand the amount of weed that farms could legally grow, a proposal sought by a cannabis business that was paying her and her husband hundreds of thousands of dollars to buy their ranch.
California’s decision to legalize recreational cannabis in 2016 ushered in a multibillion-dollar commercial pot market that officials in many small, struggling communities hoped would bring new jobs and an infusion of tax revenue to spend on police, parks and roads. But for some cities, the riches never materialized.
Instead, the advent of commercial cannabis unleashed a wave of corruption, prosecutions and accusations that has rocked local governments across the state and left them with few effective tools to combat the problem.
From the rugged mountains near Oregon to the desert along the Mexican border, a Los Angeles Times investigation found corruption or other questionable conduct covering a vast area of activities: public officials demanding cash from cannabis business owners to approve licenses; government officials threatened with physical violence over pot regulations; and elected officials accepting money from cannabis businesses even as they regulated them. In addition, the industry has donated a torrent of campaign cash to local government officials as cannabis became a new and powerful special interest.
Lobbyists, pot entrepreneurs and public officials say bribery and shakedowns have become so commonplace in cannabis licensing that it feels like a normal part of doing business.
Ruben Guerra, board chairman of the Montebello-based Latin Business Association, said he has worked with 10 applicants trying to obtain cannabis licenses from Southern California cities. He witnessed cash shakedowns of half those applicants and notified a retired FBI agent he knows.
“I was right in the middle of the negotiations, and (public officials) were telling me they need this much,” Guerra said, adding that the bribe request usually ranges from $150,000 to $250,000.
The corrupting flow of money has its roots in how California crafted its cannabis legalization law to regulate an industry that until recently operated underground. Proposition 64, the statewide measure that paved the way for commercial cannabis to launch in 2018, put the ultimate decision on where pot businesses could operate in the hands of cities and counties.
More than 12,000 licenses are active, a Times analysis of state
