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California’s legal marijuana businesses blow whistle on unlicensed operators

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That represents a culture shift. Taxpaying marijuana businesses are incentivized like never before to get the entire industry’s act together, which means blowing the whistle on bad actors.

Legalization, in other words, has turned plenty of former rebels and outlaws into narcs, in a strange twist of fate.

A strange, if not surprising, twist of fate. Being legal means you need to operate under much tighter profit margins, and unlicensed operations cut into that. As a result, there’s an incentive to report unlicensed operators.


Being illegal means you are a criminal PERIOD. California is a bit complicated on this due to the pre-existing medical collective rules under Prop. 215. We all expected legal…no one should have expected legal and cheap.


On the flip side. My neighbors think that our other neighboring legal rec grow/processor is dealing at their driveway. They say there is a ton of traffic all night. I told them to anonymously report it.

Also, same guys, I caught a facebook post looking for info on a vechile caught on camera during a burglary. They were offering money for information, no sheriff to contact, just personal, which would seem to imply that they didn’t report it.

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WE just had our first state CalCannabis inspection last week. I cracked up that their report/tip/complaint line number is 1-833-WEED-TIP. Its starting to become a thing now that everyone is on board with the new laws.


If you don’t mind, I would like to ask a couple of questions that should help everyone. Obviously, we respect to confidential nature of your business records and would only ask that you respond in general terms If you don’t remember something or prefer not to respond to a specific question that is absolutely ok/:

Was the inspection done by CDFA CalCannabis alone or was someone from BCC and CDTFA there as well?
The specific points that would permit us to offer some thoughts to the larger group are:
Is your license a temporary or an annual?
What type of Cultivation License do you have [e.g. Cottage, Tier 1, Tier 2, Indoor, Outdoor?
Did they ask anything about being a cooperative or collective?
We assume they verified your Cultivation License, did they ask for Sellers Permit or Cannabis Excise Permit?
Did they veriify Responsible Person or Agent for Service of Process Informaiton?
Did they review Owner’s or Financial Interest Disclosures in other cannabis Investments?
Did they verify Premises Information?
What did they ask about water supply?
What did they ask about power supply?
Did they verify local approval and authorization?

Did they ask for:

  • Surety Bond evidence in the amount of no less than $5,000, payable to the Department
  • Property ownership documentation or proof of the legal right to occupy and use the property for cultivation activities
  • Cultivation Plan – Premises Diagram
  • Cultivation Plan – Property Diagram
  • Cultivation Plan – Waste Management Plan
  • Evidence of enrollment with the applicable Regional Water Quality Control Board or State Water Resources * Control Board for water quality protection or written verification from the appropriate Board that enrollment is not necessary
  • Copy of any final lake or streambed alteration agreement issued by the California Department of Fish and Wildlife, pursuant to sections 1602 or 1617 of the Fish and Game Code or written verification from the Department of Fish and Wildlife that a lake and streambed alteration agreement is not required
  • 'Hazardous materials record search of the EnviroStor database for the proposed premises
  • Compliance with the California Environmental Quality Act (CEQA)
  • Complete list of financial interest holders
  • If applicable:
  • Cultivation Plan – Lighting Diagram
  • Cultivation Plan – Pest Management Plan
  • List of members of the cannabis cooperative association
  • Documents filed with the California Secretary of State
  • Foreign Corporation’s certificate of qualification issued by the California Secretary of State pursuant to section 2105 of the Business and Professions Code
  • Source of Water Supply Document(s) as indicated in Section E.2
  • Well Log or evidence from the Department of Water Resources indicating that the Department does not have a record of the well log
  • Priority Review - Evidence of compliance with the Compassionate Use Act of 1996 before September 1, 2016
    Did they ask about:

Does the business hold an ownership interest in real property, personal property, or other assets
associated with, or used in, any commercial cannabis testing laboratory license types as defined in
section 26053 of the Business and Professions Code?

Has the business had a license sanctioned, suspended, or revoked in the past three years by a
licensing authority, a city, county, or city and county for unauthorized commercial cannabis activities?  
Do you have any documented conduct that constitutes grounds for denial of licensure pursuant to
Chapter 2 commencing with section 480 of the Business and Professions Code or discipline of a license
pursuant to Chapter 3 commencing with section 490 of the Business and Professions Code?

Has the business or any of its officers or directors, been subject to fines, penalties, or otherwise been
sanctioned for cultivation or production of a controlled substance on public or private lands pursuant to
section 26057 of the Business and Professions Code?

Thanks so much if you decide to respond…any information from this would alll of us to discuss how to prepare for an inspection and what to expect.

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Almost all done expect applicators certificate , some required training, and our physicals witha mask fit test. My side of this process has been pretty painless.


Thank you so much for sharing…we appreciate it, and by the time we are done, everyone that reads this owes you a debt of gratitude. I don’t believe that there are answers for all of the questions, but everyone benefits from the sharing of knowledge. We constantly remind our clients, that the regulators have a job to do, and while I truly believe that they do want to see the industry succeed everything they do isn’t friendly to cannabis industry businesses. You may remember President Reagan joking about the gentleman that comes to visit you and states “I am from the government and I am here to help”.…most of us know how that goes.

It will take some time to read thorough your post and comment. but are sincerely appreciative of your sharing.

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We’ve seen several instances of this in AZ in which the owners of licensed dispensaries have gone after caregivers by utilizing law enforcement as their own personal security force. Dispensary owners in AZ have long viewed licensed caregivers as a threat to their carefully crafted oligopoly.

Ahhhh, growing pains in a growing industry!


This story is representative of a growing problem that will surely rear its ugly head in the future, especially as cannabis is farmed more regularly as an agricultural commodity alongside traditional crops.

There’s a big difference between a whistle-blower and a hater. Whistle-blowers have saved countless lives just because they recognized something not right…then acted.

Thanks for sharing!


California’s adult-use market is still in its infancy. There are so many gray and black market companies still existing - and it’s problematic because a good chunk of them are introducing bad cannabis into the supply chain, which can be deadly.

I really appreciate the community that cannabis industry members seem to follow. They help each other out and aren’t adverse to putting the kibosh on unlicensed companies.


Coming from the black market, Ifind it hard to out anyone just trying to get by. I do not have a problem reporting the wine growers out in Lockwood ,next to my moms house, that spray super gnarly crap on their cannabis grows nestled in the hills. I have woken up many nights seeing them spray and smelling noxious stuff that gave all of us next door people headaches for 3 days. Out there, a lot of the homestead grape growers have all put up green houses in plain site( well , plain sight out on a 4 mile dirt road in the boonies ), and they tend to not follow the rules or do anything proper. I know of two growers that have been fined for spraying illegal stuff on their grapes, I doubt they would follow any rules on the cannabis.
Its more about safety for me then just being a hater.