Report: Foreign Drug Cartels Targeting Legal Marijuana States

29 May 2018

Federal officials claim that drug cartels from Mexico, Cuba, and China are taking advantage of lackadaisical enforcement of marijuana growing laws in states with legalized recreational use. These states are becoming “hit-or-miss” in enforcing laws that still prohibit the unregulated production of marijuana.

Local and federal law enforcement officials raided 74 marijuana grow houses in the Sacramento, California, area during an operation carried out in April, NBC News reported. The actions led to the seizure of millions of dollars worth of property — much of it owned by Chinese organized crime groups.

U.S. Attorney General Jeff Sessions called it “one of the largest residential forfeiture actions” in U.S. history, NBC News reported.

Federal law enforcement officials claim that states like California, Colorado, and Washington — where recreational marijuana is legal — enforcement of growing regulations have either been hit-and-miss, or it provides cover for transnational criminal organizations (TCO) who now appear to be investing big money in real estate to get even larger returns.

The TCOs are typically Chinese, Cuban, or Mexican groups and are purchasing or renting hundreds of homes to carry out their grow operations.

The California raids were carried out in the Sacramento area and included homes in Calaveras, Placer, San Joaquin, El Dorado, Yuba, and Amador counties.

The foreign TCOs would reportedly send cash to the U.S. in increments just under the $10,000 mandated reporting limit. The money would be saved until enough was on hand to purchase a home, DEA Special Agent Casey Rettig said. The groups would utilize cash lenders instead of traditional home mortgage companies.

A Washington State bust that occurred in the fall of 2017 resulted in the arrest of 40 suspects and the seizure of $80 million worth of cannabis, the Grays Harbor County Sheriff’s Office told NBC News.

“The majority of these homes were purchased with cash, and information was developed that these purchases were conducted by Chinese nationals involved in organized crime,” a statement from sheriff’s office statement revealed.

Nineteen other raids in Washington State carried out this month uncovered an alleged ring operated by three Chinese nationals who were said to be producing marijuana to be shipped to New York.

Mike Hartman, Colorado Department of Revenue executive director, is tasked with regulating and licensing the state’s legalized cannabis industry. He says the TCOs are targeting these legalized marijuana states “in an attempt to shroud their operations in our legal environment here and then take the marijuana outside of the state.”

Since marijuana was legalized in Colorado, highway seizures of the drug headed to other states is up by 43 percent, NBC News reported. “Columbia is to cocaine as Colorado is to marijuana,” DEA Agent Randy Ladd told NBC’s Gabe Gutierrez. He said these states are “absolutely turning a blind eye to it.”

Gutierrez traveled along with DEA agents as they raided a home in an upscale Colorado neighborhood. The leased home, owned by a Naval officer who had been transferred out of the area, had been converted into a massive pot-growing operation that took over the home’s entire second floor. The owner of the home was shocked to learn that a Cuban criminal group had nearly destroyed his home.

Despite the rampant growth of illegal marijuana growing operations in Colorado where authorities seized 3.5 tons of the drug in 2016, U.S. Senator Cory Gardner (R-CO) threatened to block the nominations of Department of Justice positions after Attorney General Sessions announce a tougher marijuana policy
Breitbart News’ Senior Editor-at-Large Joel Pollak reported in January.

Sessions announced plans to rescind an Obama-era memo that said the DOJ would refrain from enforcing federal drug laws in states that had legalized marijuana.

Cory Gardner @SenCoryGardner
4 Jan
Replying to @SenCoryGardner
This reported action directly contradicts what Attorney General Sessions
told me prior to his confirmation. With no prior notice to Congress, the
Justice Department has trampled on the will of the voters in CO and other states.

Cory Gardner @SenCoryGardner
I am prepared to take all steps necessary, including holding DOJ nominees, until the
Attorney General lives up to the commitment he made to me prior to his confirmation.
8:10 AM - Jan 4, 2018

Colorado investigators busted several members of a Vietnamese-American organization involved in an operation that would grow marijuana illegally in Colorado and smuggle it to Texas, Breitbart Texas reported in September 2016. The operation came to light after a Texas Department of Public Safety (DPS) trooper pulled over a vehicle driven by Tien Nguyen in Smith County. The trooper discovered over $70,000 in cash. His driver’s license carried the address of the home in Colorado mentioned above. The cash as packed in vacuum-sealed bags in the hatchback and glove box. He was charged with money laundering in Smith County. The investigation led to the arrest of 30 people in Colorado and Texas. The Houston Chronicle called Colorado the “Napa Valley of cannabis.”

Not long after officials exposed this operation, another bust took place in Denver in what the state’s attorney general called “a massive illegal interstate marijuana distribution and cultivation network stretching from Colorado to Texas,” the NBC News article states. This investigation resulted in the seizure of millions of dollars in laundered cash and 2,600 “illegally cultivated” marijuana plants, and 4,000 pounds of harvested cannabis.

The law enforcement officials uncovered the drugs in 18 warehouses and storage units along with 33 homes, mostly in the Denver area. The Office of the Colorado Attorney General said they had “only scratched the surface.”

The market is lucrative for the foreign drug cartels who can get upward of $4,000 per pound of marijuana by growing it in legalized states and shipping it to the east coast, NBC News concluded. “The profits are great there,” DEA Agent Ladd said.