As more states legalized marijuana, the hope was that a regulated market would replace illegal grows, push out criminal actors, and give law enforcement clearer lines to work with.
But federal and state officials say organized crime has adapted.
According to narcotics experts, Chinese criminal syndicates alleged by law enforcement and analysts to have ties to the Chinese Communist Party have become dominant players in the marijuana black market.
These syndicates are using legal cannabis states as cover for large-scale illegal operations that stretch well beyond U.S. borders.
Rob Roggeveen, national deputy coordinator of the Marijuana Impact Group within the High Intensity Drug Trafficking Areas program, told The Epoch Times that Chinese criminal networks now control a majority of the marijuana black market, which he described as a global enterprise worth hundreds of billions of dollars a year.
“This stuff is being exported out of the country,” Roggeveen said. “It’s an international business for them.”
The Black Market Didn’t Shrink — It Found New Shadows To Hide In
The economics explain the attraction.
Illegal marijuana can be grown cheaply in legal states, sometimes for a few hundred dollars a pound.
That same product can sell for several times that amount in states where marijuana remains illegal, and for far more overseas in countries with stricter penalties.
Roggeveen said these groups aren’t growing marijuana in the U.S. just to serve domestic demand.
They’re using the legal landscape to feed international distribution networks.
A decade ago, Mexican cartels dominated marijuana trafficking, often smuggling product across the border or hiding grows on public land. Roggeveen said that model has changed significantly.
“Somewhere along the line, that trade changed hands,” he said. “It went from the Mexican cartels to the CCP.”
Why the Cartels Aren’t Fighting
What’s notable, investigators say, is the lack of open conflict between Mexican and Chinese groups.
Rather than fighting for control, evidence presented to Congress suggests cooperation.
Several witnesses at a House Homeland Security subcommittee hearing pointed to suspected alliances, including Chinese-run money laundering operations that benefit Mexican cartels.
Former DEA agent Christopher Urben testified that Chinese organizations now handle much of the money laundering for Mexican cartels, often using cryptocurrency and platforms such as WeChat.
The U.S. Department of the Treasury has also warned that Chinese money laundering organizations are now among the most significant professional laundering actors operating in the United States and globally.
How Illegal Grows Hide Among Legal Ones
None of the experts testifying argued that legal marijuana itself is the enemy. The concern raised repeatedly was uneven enforcement.
In states where penalties for illegal cultivation were reduced and resources were redirected away from marijuana enforcement, criminal organizations found room to operate.
Illegal grows could hide among licensed ones, using shell companies, straw owners, and fraudulent paperwork to appear legitimate.
California was cited as a key example. Roggeveen said the black market there has in many areas outpaced or undercut the legal market, hurting licensed growers who follow the rules, pay taxes, and comply with regulations.
Oklahoma became another major hub after legalizing medical marijuana in 2018.
State narcotics officials testified that at the height of the problem, as many as 85% of black-market grows were linked to Chinese organized crime, often using residency fraud and straw ownership to obtain licenses.
Investigators also described labor trafficking, with undocumented workers living in makeshift camps under threat and control.
“They’re treating human beings like trash,” Roggeveen said.
Keeping Nevada’s Legal Market Clean
Nevada legalized recreational marijuana in 2016 and operates a regulated cannabis system designed to distinguish lawful businesses from illegal activity.
At the same time, the state sits along major interstate corridors that already serve as trafficking routes for drugs, cash, and weapons.
Diversion and illegal grows remain persistent risks in legal states when oversight or enforcement falls behind criminal innovation.
The problem is that criminals don’t play by the rules – they actively look to circumvent them. That means law enforcement is often playing catch up.
The lesson from other states isn’t that legalization failed. It’s that legalization without consistent enforcement can create openings that sophisticated criminal organizations exploit.
This Goes Beyond Marijuana
Some witnesses framed the issue as more than a drug problem.
Paul Larkin of The Heritage Foundation told lawmakers that, given China’s extensive domestic surveillance apparatus, it’s hard to believe Chinese authorities wouldn’t know about large-scale criminal activity conducted by Chinese nationals abroad.
Other witnesses warned that some illegal grow sites have been located near military bases, pipelines, and other critical infrastructure, raising broader security concerns.
Rep. Josh Brecheen, who chaired the subcommittee hearing, described the convergence of organized crime, money laundering, and foreign influence as a national security issue.
Law enforcement officials urged the Department of Justice to use the RICO Act to target these networks as criminal enterprises.
It would allow prosecutors to target entire criminal networks, tying together money laundering, fraud, and trafficking in a single case.
In other words, it lets prosecutors go after the whole operation.
What Law Enforcement Is Up Against
Legal marijuana didn’t cause organized crime, and unfortunately it hasn’t stopped it either.
For Nevada and other legal states, the task now is simple to state and hard to execute.
It’s ensuring regulatory systems are strong enough to protect lawful businesses, prevent diversion, and deny organized crime the ability to hide in plain sight.
That’s the work law enforcement says still needs to be done.
The opinions expressed by contributors are their own and do not necessarily represent the views of Nevada News & Views. Digital technology was used in the research, writing, and production of this article. Please verify information and consult additional sources as needed.
