Why Colorado's Black Market for Marijuana is Booming 4 Years After Legalization

Briar Stewart · CBC News

Criminal organizations have moved into Teller County, a community of 24,000 nestled in the Rocky Mountains about 160 km south of Denver, and are illegally growing marijuana there that they smuggle out of state. The sheriff's office in the county says it has 400 kilograms of marijuana sitting in storage as evidence. (Teller County Sheriff)

When recreational marijuana went on sale in Colorado in 2014, the government's goal was to regulate and tax a drug that was already widely used and to squeeze out dealers and traffickers in the process.

But law enforcement authorities in the state say legalization has done the exact opposite.

Even though there are more than 500 recreational marijuana dispensaries in the state, the black market is booming. It's being driven by criminal organizations that grow weed in Colorado and smuggle their crop into states where it is still illegal and can be sold for a much greater profit. 

The black market hasn't gone away within the state, either, because some marijuana users are deterred by the higher dispensary prices and are loyal to their long-time dealers.

Investigators say the illegal trade has flourished because the state laws around growing marijuana were overly generous in the beginning and hard to enforce.

As Canada prepares for legalization, CBC News spoke to insiders to get their perspective on why the black market is thriving in a place where pot is legal.

The DEA

Investigators with the federal Drug Enforcement Administration (DEA) focus on the largest and most serious drug trafficking rings operating in the United States.

Paul Roach, a DEA supervisor, says his team spends about 15 per cent of its time on marijuana trafficking cases — a threefold increase from before legalization.

"Colorado has basically become the marijuana capital of the United States," he said.

And Canada is determined to become the marijuana capital of the world! There are several companies already planning on growing massive amounts of pot in Canada and shipping it to Europe. Of course, they will only be going to legitimate markets. 

"You find drug trafficking organizations moving here, setting up shop in Colorado and sending it back to their home states where they can sell it at incredible profit."

Not in Canada, all our drug trafficking organizations will be legal, honest and completely trustworthy. Sunny ways, my friends, sunny ways.

DEA agents document Operation Golden Gopher, in which they raided several Denver warehouses they say housed marijuana intended to be smuggled out of state.

Colorado's high-altitude weed is being trafficked to dozens of states, but some of its largest recipients are Florida, Illinois and Texas, according to a report by the Rocky Mountain High Intensity Drug Traffic Area. It works to support the national drug control strategy while co-ordinating investigations between different authorities. 

When DEA agents raided this home in April, they found marijuana grow lights, dodgy electrical wiring, and mildew and mould. They say the people who were living here had hastily packed up. (Briar Stewart/CBC)

Criminal organizations, including groups tied to Mexican and Cuban drug cartels, are growing marijuana in rental homes, warehouses and even on forested federal land.  

In some cases, they are operating in plain sight and are disguised as legitimate operations.

"The cartels and drug trafficking organizations, in general, will go where they will make money," Roach said.

"If they see an opportunity in Canada to increase their profits by exploiting Canada's laws, then I expect them to do that."

The local sheriff

Jason Mikesell is sheriff of Teller County, Colo., a rural community nestled against the Rocky Mountains.

This picturesque county of 24,000 is favoured by young families and retirees, but Mikesell says criminal organizations are also moving in to smuggle pot out.

"Never would we have thought that we would have this issue going on in our community," he said.

Jason Mikesell, who will soon be up for re-election as Teller County sheriff, says the issue of illegal marijuana is a major concern for his rural community. (Chris Corday/CBC)

While he believes most of the illegal marijuana grown in Teller County is destined for out of state, he also says there is a local black market.

Last fall, Mikesell wanted to sell an SUV, so he listed it on Cragislist. A prospective buyer offered to trade for nearly two kilograms of pot.

Mikesell set up the trade, and when the buyers arrived, they were arrested and charged with illegal distribution of marijuana. One of them was convicted and recently sentenced to four years in prison.

Bucolic Teller County has seen an uptick in illegal activity related to marijuana following legalization of the drug in Colorado in 2014. (Briar Stewart/CBC)

Mikesell says Colorado was the test subject for legal weed in the U.S., and the state regulations that made enforcement difficult because people were allowed to grow so much of their own marijuana.

In the beginning, each person could grow up to six plants, and they could pool them together in a co-op.

Medical patients could grow up to 99 plants and appoint a caregiver to grow it for them.

More restrictive laws were introduced earlier this year, limiting each residence to a maximum of 12 plants, so the sheriff's office has been able to ramp up enforcement.

The sheriff's team has raided eight houses so far this year and has seized more than $3.5 million US of marijuana. During those investigations, they arrested more than 20 cartel members with connections to Cuba and Miami. 

Mikesell says his team has been tipped off about some of the grow operations because people have called in complaining about strong odours in their neighbourhood. 

"We know there are another 60 or 70 marijuana houses we haven't got to yet," said Mikesell.

Other local police departments in Colorado are getting similar calls from residents who also report excessive noise from air conditioning units and blown electrical transformers, according to the DEA.

I can hardly wait for the stink and the noise to come to Canada full force.

The drug dealer

A dealer who agreed to speak with CBC News on condition that he not be named said he spends most of his days in the front seat of his sedan driving around Denver. An air freshener dangles from the mirror of his vehicle, but it can't disguise the lingering smell of weed.

On his lap, he holds a plastic bag containing marijuana buds.

"In a good day … I am making $400 to $500," he said.

This man advertises online and runs a marijuana delivery service in the Denver area. He has his own plants and also gets product from other growers. (Briar Stewart/CBC)

The father of two advertises online along with dozens of others who grow and sell marijuana illegally.

He runs a delivery service and sells marijuana that he's picked up from a network of growers who have "extra" product, and he also grows his own. He compares himself to a pizza delivery man because, he says, he guarantees delivery to anywhere in Denver in less than an hour.

He says legalization hasn't had a big impact on his business because he caters to clients who don't want to be seen going into a dispensary. 

"I have had nurses that have contacted me via the internet and have a delivery brought to their home or their office or wherever they feel comfortable," he said.

His clientele also includes a number of truck drivers, who are prohibited from using marijuana under federal transportation laws.

Dozens of ads listing cannabis for sale in bulk quantity can be viewed on sites like Denver Craigslist. (Craigslist)

While the dealer's operation helps him provide for his family, it isn't his full-time job. He says he has a couple of more "respectable" side projects that keep him busy, but he says one of his goals is to make marijuana more accessible.

He does worry about being caught by the police but admits there are other risks to operating in the black market.

"I have had people sit right there ... with a gun to my head," he said, pointing to the front passenger seat.

"It's a definite risk."

This tourist from Michigan was one of the thousands who gathered in Denver's Civic Center Park in April to take part in the city's annual 420 celebration. (Chris Corday/CBC)

The advocate

Whenever Larisa Bolivar, 42, wants to pick up some marijuana, she heads to one of her preferred Denver dispensaries where she can buy cannabis to smoke and edibles to eat. 

As president of Colorado's Cannabis Consumers Coalition, she is both a longtime user and an advocate. For the past two years, she has conducted online surveys by polling marijuana users about just where they get their pot from. She reached out through the coalition's Facebook page, which has 17,000 members, and contacted people directly after obtaining customer lists from cannabis-related companies. 

Larisa Bolivar, president of the Cannabis Consumers Coalition, conducted a series of online surveys asking people to disclose where they purchase their marijuana. The surveys found around 50 per cent of respondents are not getting their marijuana at dispensaries. (Briar Stewart/CBC)

She had 527 people respond to her 2017 survey, and while she is still tallying the results for this year, she says the findings are consistent. 

Black market still bigger than legal one

"There is still a larger percentage of people buying from the black market [than legally]," she said.

The results of Bolivar's Facebook survey suggested nearly 50 per cent of the respondents were not shopping at the state's licensed dispensaries. Bolivar says most are buying their pot off of friends or sticking to their regular dealers because they trust them.

In Colorado, you have to be 21 to buy from a dispensary, and you have show identification. Bolivar says accessibility is also an issue: not all communities have retail stores.

And, there is a large market for under-21s that needs to be serviced. Legalizing pot does not reduce the number of teens accessing it. In Colorado, more teens are using pot than ever and it is very dangerous for teens, especially young or mid-teens, to smoke pot as it frequently results in the onset of Schizophrenia and/or other psychotic disorders that seriously affect the rest of your life.

Colorado, which has a population of around 5.6 million, has more than 500 recreational marijuana dispensaries. (Briar Stewart/CBC)

Taxes and fees on marijuana have brought in more than $250 million US to the state last year. Bolivar says those additional costs are the biggest driver toward the local black market.

"I really think a lot of it has to do with price," Bolivar says.

The tax rates vary by municipality. In Denver, for example, people buying recreational marijuana pay a tax of 23.15 per cent.

"If I can save $5 on a purchase, that is a cheap lunch," Bolivar said.

The haste in Canada to start collecting taxes from pot smokers without serious study of the consequences, is extremely disturbing. I believe there will be unforeseen, and even foreseen consequences that will cost Canadian society dearly. Instant and inexpensive gratification will continue to increase dramatically to the detriment of long-term planning and the next generation. Nothing good will come out of this.

NGO: U.S. Lost Track of 3/4 of a Million Guns in Afghanistan, Iraq

I am convinced that if Americans didn't sell guns, either legally or on the black market, or give them to others to sell on the black market, for two consecutive days, that their entire economy would collapse.

How many Americans and American allies have died or been

wounded in Iraq and Afghanistan by weapons made in the USA?

Does anybody know? Does anybody care?

Ceerwan Aziz-Pool/Getty Images

by EDWIN MORA

The Pentagon has lost track of at least 750,000 guns it provided to security forces in Afghanistan and Iraq during 14 years of the ongoing war on terror in response to the 9/11 attacks, according to a tally by Action on Armed Violence (AOAV), a London-based charity.

The lost weapons could be fueling the black market, reports The New York Times (NYT).

NYT explains:

With a string of Freedom of Information Act [FOIA] requests that began last year, he [Overton] and his small team of researchers pooled 14 years’ worth of Pentagon contract information related to rifles, pistols, machine guns and their associated attachments and ammunition, both for American troops and for their partners and proxies. They then crosschecked the data against other public records.

The outlet also states:

Today the Pentagon has only a partial idea of how many weapons it issued, much less where these weapons are. Meanwhile, the effectively bottomless abundance of black-market weapons from American sources is one reason Iraq will not recover from its post-invasion woes anytime soon.

The charity’s research covered U.S. Department of Defense (DoD) data from September 11, 2001, thru September 10, 2015.

AOAV found that of an estimated 1.45 million guns the U.S. government gave to Iraq and Afghanistan over that period, the Pentagon could only account for 700,000 (48 percent).

The 1.45 million small arms included more than 978,000 assault rifles, 266,000 pistols, and almost 112,000 machine guns.

AOAV reports:

This [700,000] only accounts for 48% of the total small arms supplied by the US government found in open source government reports.

Such shortfalls highlights [sic] the lack of accountability, transparency and joined up data that exists at the very heart of the US government’s weapon procurement and distribution systems. AOAV’s findings are backed up by previous reviews. For instance, a US Government Accountability Office [GAO] report from 2007 found the US government had issued at least 185,000 AK47s procured for Iraq between 2004 and 2005 alone. Another 5,000 AK47s were recorded as being sent to Iraq in a US Overseas Contingency Operation (OCO) request report in 2015. And yet, the DoD only claims 22,249 rifles of 7.62mm calibre were sent to Iraq. As the DoD pointed out, their data does not include weapons that were provided by the Department of Defense to the security forces in Iraq and Afghanistan without using the Foreign Military Sales system.

A 2014 Special Inspector General for Afghanistan Reconstruction report also found, that in Afghanistan, 43% (or 203,888) of US funded small arms had duplicate or incomplete records.

NYT received an email from Mark Wright, a Pentagon spokesman, trying to explain the estimated 750,000 gap between the DoD’s count of 700,000 and the researcher’s tally of 1.45 million.

Wright wrote, “Speed was essential in getting those nations’ security forces armed, equipped and trained to meet these extreme challenges. As a result, lapses in accountability of some of the weapons transferred occurred.”

The spokesman noted that the Pentagon has improved its oversight and that to ensure “that equipment is only used for authorized purposes,” its representatives “inventory each weapon as it arrives in country and record the distribution of the weapon to the foreign partner nation.”

NYT points out:

Overton’s analysis also does not account for many weapons issued by the American military to local forces by other means, including the reissue of captured weapons, which was a common and largely undocumented practice.

Adding to the suspicion that the number is even larger, Overton is certain that his tally missed shipments, because the data that the Defense Department made available was incomplete or laden with contradictions that were not readily reconciled.

Insanity reigns supreme in arms manufacturing! 'Just keep that inventory moving boys.'

Thai Tiger Temple Monk Caught Fleeing with Skins, Fangs

By AFP

Thai authorities uncovered a trove of animal parts and intercepted a monk trying to leave a controversial "tiger temple" with skins and fangs Thursday, the latest discovery to fuel accusations that the zoo is involved in the illegal wildlife trade.

Dozens of police and park officials have been stationed at the Wat Pha Luang Ta Bua temple in western Kanchanaburi province since Monday after receiving a court order to remove over 100 adult cats from the complex.

For decades the infamous temple has been a popular stop for tourists who pay a steep fee to pet and be photographed with the predators -- which animal rights groups say are heavily sedated.



Thai wildlife officials load a tiger into a cage on a truck after they removed it from an enclosure after the animal was anaesthetised at the Wat Pha Luang Ta Bua Tiger Temple in Kanchanaburi province, western Thailand on May 30, 2016 ©Christophe Archambault (AFP/File)

"Today we found tiger skins and amulets in a car which was trying to leave the temple," Adisorn Noochdumrong, the deputy director of Thailand's parks department, told AFP.

He said around 10 tiger fangs were also found in the truck, and that some of the hundreds of amulets contained tiger parts.

In addition to skins that were later found in monks' quarters, officials discovered a living lion, hornbill, sun bear and banteng (an endangered species of wild cattle) inside the temple compound, he said.

They also uncovered around 20 containers of preserved tiger parts holding "both whole bodies and organs to be used for medicines," Adisorn told AFP.

The discovery comes after authorities found dozens of dead tiger cubs inside a freezer at the temple Wednesday.

Animals rights groups and conservationists have long accused the temple of secretly acting as a tiger farm and reaping huge profits from selling animals and tiger parts on the black market for use in Chinese medicine.


A Thai wildlife official speaks with a monk before officials removed tigers from enclosures at the Wat Pha Luang Ta Bua Tiger Temple in Kanchanaburi province, western Thailand on May 30, 2016 ©Christophe Archambault (AFP/File)

The temple has always denied trafficking allegations and says it provides higher quality care for the animals than official park facilities.

Repeated efforts to shut down the site over the years have been delayed and complicated by the fact that secular Thai authorities are often reluctant to intervene in the affairs of the clergy.

Park authorities said they have removed 84 tigers so far this week and are transferring the animals to nearby breeding centres.

Police said they have not filed any criminal charges yet and are still investigating the temple.

Previous raids of the temple revealed that dozens of hornbills, jackals and Asian bears were also being kept at the sanctuary without proper permits.


Thai wildlife officials use a tunnel of cages to capture a tiger and remove it from an enclosure at the Wat Pha Luang Ta Bua Tiger Temple in Kanchanaburi province, western Thailand on May 30, 2016 ©Christophe Archambault (AFP/File)