Marijuana Industry Special Section - Cal Humanities

UNLICENSED and UNBOTHERED in the South Bay

Federal and local changes to affect South Bay cannabis industry

By Delfino Camacho

In 2023, the Torrance Green Room, a marijuana dispensary, opened right across from the El Camino College Police Department.

The problem? Cannabis shops are illegal in Torrance.

El Camino student Luis Tellez visited the shop several times before it was shut down in late 2023. When asked why risk using an illegal shop when licensed ones were available elsewhere, Tellez scoffed.

“That s–t is too expensive. I don’t know who those legal shops are for but they’re not for us,” he said.

In 2016, Proposition 64 legalized recreational marijuana use for adults 21 and older and aimed to create a regulated, tax-generating cannabis industry. However, individual cities and counties have final say on whether to permit cannabis businesses.

Tips on how to stay safe when sparking up. Learn about licensed and unlicensed products/shops.

On May 16, a federal formal proposal was made to reschedule marijuana from schedule 1 to schedule 3, marking a major policy shift. Locally, the city of Hawthorne allowed licenses in 2022 with the first shop set to open by end of the year.

City officials confirmed that besides delivery, all cannabis businesses within Torrance are illegal. The city employs a Cannabis Task Force that deals with discovered and reported unlicensed shops.

After the Torrance Green Room was shut down, Tellez found another shop near El Camino. Like many unlicensed locations, the shop discreetly advertises itself with a green cross.

Working there is Princess, a 23-year-old budtender from South Central who has been in the unlicensed industry since she was 16. She said getting her job required a fake ID, being a girl and “being pretty.”

The Cannabis Equity Act was supposed to help those most impacted by the war on drugs. Is it?

Her shop, offering unregulated products at reduced market prices, makes $5,000 to $8,000 daily in cash sales. Despite frequent raids, she said the low overhead allows quick reopenings. Princess has experienced four raids, once being kicked in the face by police.

Budtenders earn a minimum of $200 daily, plus tips. Princess believes the underground market will survive despite the recent federal and local shifts.

“These changes, I feel like they are trying to make it harder for us trap shops but the thing about us people is we are always gonna find a way,” she said.

Elliot Lewis is the CEO of Catalyst, a licensed marijuana company with 27 current dispensaries and more pending. One new location will be in Hawthorne, expected to open by year-end with approved retail and distributor licenses. This will be Hawthorne’s first licensed shop and will also allow on-site consumption. SEE UNLICENSED PAGE B2→

An interview with Steven Bradford, state senator and author of the Cannabis Equity Act.

An illustrated map of the South Bay cities with information about legalization and equity.

El Camino College and Compton College student Luis Tellez takes a hit of his marijuana wax concentrate vape pen on Saturday May 25. Tellez, who frequents unlicensed weed shops says he is open to visiting an upcoming licensed shop set to open in Hawthorne by the end of the year, but only if the price is right. Photo Illustration by Delfino Camacho

First licensed weed shops coming to Hawthorne

Lewis previously attempted to introduce licensed shops in Manhattan Beach, El Segundo, Hermosa Beach and Redondo Beach, but the initiatives failed. He described these efforts as costly mistakes, noting the gap between statewide support for marijuana and local acceptance.

“The juice just isn’t worth the squeeze, it’s easier just to sit back, wait until the city passes it,” he said.

Lewis doesn’t view unlicensed shops as competition, aiming to build a new customer base. He attributes challenges in the legal market to high taxes and regulations, although he does acknowledge safety issues in unlicensed shops.

“I don’t hate on the black market; it’s people trying to make bread. It’s the result of poor policy,” he said.

Fynnwin Prager, director and associate professor at CSU Dominguez Hills and codirector of the South Bay Economics Institute, is part of a team that received a nearly $2 million grant in 2020 to study the cannabis business in the South Bay.

Prager says taxing and regulating cannabis aims to make legalization more acceptable, but high taxes can reduce productivity and incentivize illegal activity.

Lewis doesn’t see unlicensed shops as competition. Prager’s

research suggests he might be right. While more study is needed, initial findings indicate licensed dispensary customers have “a less elastic price range” and remain loyal despite price increases.

“We don’t know for sure whether there is a clear movement to the illicit market from the licensed market in terms of customers,” Prager said.

stick with licensed shops is product safety standards.

at Jade Room, a legal dispensary

she understands why licensed business owners’ would be frustrated with unlicensed shops like the one she works at.

“They tend to hate the trap shops because they worked really hard, they go through all the steps of being able to do what they do and a lot of times they’re investing a lot of their money or even losing money,”

changes and with Catalyst opening in Hawthorne, Princess believes unlicensed shops are safe, insisting they serve unique markets.

in Harbor Gateway, LA. Before legalization, she grew marijuana and sold it to “trap shops.”

stories of finding bugs and mold in their flower although Tellez reports satisfaction with his unlicensed experience.

getting from the traps...it’s not tested, it can have pesticides, it could have mold,” she said.

Besides their product and increased taxes, licensed shops also pay for product testing. Budtender Princess says that

Smoke safe Six safety tips

to follow

By Monroe Morrow

M

Princess said her company is organized, with many shops and a structured system. They use WhatsApp to communicate with owners and investors who

There are dangers involved in the underground. While working

Hawthorne Police Chief Gary Tomatani said now that the city has authorized cannabis businesses, his role is to ensure their safety while addressing the community concerns. He mentioned protocols in place to shut down unlicensed shops and to maintain that licensed shops stay safe, including police access to video feeds.

Tomatani sees the local shift as aligning with the state’s marijuana stance and believes the industry will become less controversial over time.

12- to 16-hour shifts, Princess has been threatened, harassed and spit on by customers and coworkers. Some shops are in dangerous areas, taxed by local gangs. As for why people work in the industry, Princess says as a convicted felon with no diploma and two kids, her options are limited.

“The thing about working at the trap shop is it pays and I don’t have to worry about my character, how I carry myself in the environment,” she said. Even with potential national

“I think people made an educated decision based on where they’re at when they voted on that issue,” he said. “I think that the city of Hawthorne is doing everything it can to ensure that we emphasize the positives of this opportunity as opposed to the potential negatives.”

CEO Lewis is cynical about the government’s handling of the cannabis industry, saying high taxes and regulations crippled a legitimate industry for those without degrees.

“You can’t do both, you can’t tax the s–t out of it and then claim you ended the war on drugs, you just can’t do both,” he said.

To read more of the story, visit the website at eccunion.com before sparking up

edical marijuana first became legal in California under the Compassionate Use Act in 1996.

Twenty years later, on Nov. 8, 2016, recreational use became legal under the Adult Use of Marijuana Act. Legal dispensaries opened up and became fully operational with the proper licensing and by following the rules and regulations set by the Department of Cannabis Control. Nearly eight years after legalization, unlicensed dispensaries are still common and often do not follow the regulations set by the DCC.

So for those that want to dabble in the Mary Jane, here are six safety precautions that can help you stay safe

A variety of both licensed and unlicensed marijuana products purchased from different South Bay shops on May 19. The products on the right are licensed and tested while the products on the left are unlicensed. Scan the QR code below tip 1 for a product price comparison and the full story at eccunion.com. Photo by Monroe Morrow

A licensed dispensary must have their licenses posted for the public eye to see.

Packaging must be child safe, opaque and sealed. Unlicensed dispensaries are known to store their product in glass jars or in clear bags. Packaging can be a clear sign, copyright infringement can occur.

Hours As confirmed by the DCC, in the state of California licensed dispensaries are only allowed to operate from 6 a.m. to 10 p.m.

Unlicensed products tend to be cheaper than licensed products due to taxes. Low prices and no taxes are consistent with unlicensed dispensary practices.

Consumers should pay attention to expiration dates on all products. According to the DCC, expired products are prohibited for sale.

Every licensed dispensary (or cannabis business for that matter) must ask for ID verification. Shops could lose their license if they fail to ask for identification.

Princess, who works at an unlicensed dispensary, blocks her face with a stress toy used as a first-time customer giveaway.

Photo by Delfino Camacho

By Kim McGill

Nearly 50 years ago, James Marks was sitting on the family couch in the Carmelitos Housing Projects located on the north side of Long Beach watching Saturday morning cartoons.

In an explosion of noise and confusion, five people burst through the front door.

One of them shouted, “Where that b—ch at?” Without waiting for an answer, they tore through the apartment, making their way upstairs to where Marks’ aunt was sleeping.

Marks jumped up – a kid in pajamas and bare feet – and ran to the bottom of the stairs in an effort to intervene.

A man with a handgun said, “Nah, sit back down, little man.”

He returned to the couch, and hugged tightly on his sister and baby cousin.

“When I get older no one will ever be able to do us like this,” he said to them.

The next day, Marks said he left his childhood behind and looked for power and opportunity on the streets.

He was first locked up at the age of 12. Overall, he spent 11 years of his life incarcerated.

History

The underground drug economy wasn’t built by local neighborhoods, although Black and Brown communities were blamed and punished.

After decades of marijuana criminalization, California voters passed Proposition 64 in 2016, the Adult Use of Marijuana Act, with a wide margin, 57% in favor, 43% opposed.

Two years later, the “California Cannabis Equity Act” was passed to give those who have been negatively impacted by the War on Drugs

support and priority to participate in the multibillion cannabis industry.

But, Marks and others say that legislative promises have been broken.

“We were targeted. We are owed opportunity, access, equity. We’re owed some of these dispensaries.” Marks said.

Now 56, Marks has spent years organizing for equity in the implementation of cannabis legalization. He said that out of 38 cannabis licenses in Long Beach, only one is Blackowned.

“You’re selling drugs in our community and we can’t sell drugs? I got people that are still incarcerated behind this,”

Marks said.

“Their families are devastated and impacted forever.”

In-Equity

As of January 2024, California had 866 licensed dispensaries and 374 licensed marijuana delivery businesses.

In 2018, the “California Cannabis Equity Act” authorized the state Department of Cannabis Control (DCC) to provide funding and technical assistance to equity programs. Applicants have to navigate both local and DCC (state) licensing processes.

Equity grants are provided to local jurisdictions through the Governor’s Office of Business and Economic Development (GO-Biz).

Local jurisdictions are left to establish their own equity programs and to recruit, select and support equity businesses.

Miriel Bereal was born and raised in Long Beach.

She first went through the dispensary application process in Los Angeles, where she lost her business to investors who were only using her as the “face” needed to gain an equity license.

Some cannabis companies look for people impacted by drug criminalization to front their operation.

“I would call them puppets,” Bereal said.

In the city of LA, only 11 out of 105 social equity licenses issued by the Los Angeles Department of Cannabis Regulation are operating businesses. Only four are women-owned.

Nationally, 85% of cannabis ownership is white.

“Equity isn’t receiving its 40 acres and a mule,” Bereal said. “The wealthy white person is. The Russian and Chinese investors are.”

A city councilmember told Marks that the plan for cannabis equity in Long Beach was to hire 51% of the community and expungements [of residents’ criminal records].

“That’s not equity,” Marks said to the official. “That’s slavery. Equity is ownership.”

Dangerous Results

Legalization was also promoted as a way to improve industry safety and opportunities.

But workers in both licensed and unlicensed shops report that conditions remain exploitative and dangerous.

During the pandemic, 21-year-old El Camino student

Juan Hernandez found a budtender job at VIP Collective, an unlicensed dispensary sandwiched between two other unlicensed shops on Western Avenue in South LA.

On Feb. 26, VIP’s owner Weijia Peng, 34, and the dispensary’s manager Ethan Astaphan, 30, were found guilty of killing Hernandez.

In the days leading up to Hernandez’s murder, Astaphan messaged Peng in WhatsApp, “LA is horrible. This business is toxic, but an eye-opener. I see

Q&A with state senator, cannabis social equity act author

By Ma. Gisela Ordenes

The Union talked to state Sen. Steven Bradford, D-Gardena, author of California Cannabis Equity Act. Bradford is the first to admit that the law did not fully achieve what it set out to do.The law was passed two years after Proposition 64 to help “persons most harmed by cannabis criminalization and poverty be offered assistance to enter the multibillion-dollar cannabis industry as entrepreneurs or as employees with high quality, wellpaying jobs.”

The Union: You’re the principal author of the bill about cannabis and social equity. Please talk about that.

how it turns you into a paranoid, hateful person.”

Three years ago, Marcie Ramos, 34, started working for a large cannabis company that owns 30 licensed dispensaries, grow operations, manufacturing and distribution.

“I didn’t get an interview,” Ramos said. “There was no orientation.”

She started at $17 an hour as an administrative assistant. Now she works in billing, tracking income owed, and handling disbursements.

Despite responsibilities she said her manager, who earns $90,000 a year, can’t do, she now earns $20 an hour, the same as an entry-level fast food worker.

The owner is Asian and has a Russian partner. In the entire company, she knows of only one Black and one Latino manager. All other managers are white or Asian. The lowest paid workers — the cutters in the indoor grow warehouses — are nearly all Latina women.

Ramos also said there is no staff or management training on sexual harassment, despite a culture of abuse.

She said she used to wish she could move up in the business.

“That’s something that I really thought about. But I can’t pour myself into something that doesn’t value me.”

Marks worked for one of the largest cannabis companies in Southern California. He said conditions are “horrific” inside dispensaries.

“You have people working from sun-up to pass out, 16, 18, 19 hours. No benefits. Getting minimum wage. People’s lives are on the line, verbal threats, people coming in to rob it,” Marks said. Both licensed and unlicensed shops are “straight trap houses.”

To read more, visit eccunion.com

Bradford: I introduced a bill in 2018, SB 1294, which was a social equity cannabis bill, the first in the nation to hopefully diversify the industry since we’ve legalized it in 2016 through Prop 64. That’s the purpose of the bill because a year into the implementation, and we realized it was lacking diversity in that space of minorities as well as women.

The Union: What’s your assessment of the law, six years after it passed?

Bradford: It’s still lacking. Here we are eight years after we passed Prop 64 and the market industry as a whole is still 85% white maledominated. So we all should be concerned if cannabis is going to be successful in California, it should reflect the diversity of the state, and it doesn’t right now.

The Union: Can you enumerate what those inadequacies are?

Bradford: It’s the lack of diversity. I mean, it’s still, again, a lack of diversity here, and the barriers of entry, that exorbitant taxes that it requires to run a facility, dispensary. So just many of the financial barriers that exist, and even though there are people of color who have the financial means, again, securing a license is a cumbersome task. So streamlining that process as well should be something that we looked at as well.

The Union: There are concerns that the law is being abused by those who are not really qualified to apply for the license.

Bradford: We see a lot of folks who are not social equity applicants who are applying for it, individuals who move into neighborhoods simply because of the zip code, and they apply for it. That’s not what the bill was about; it was about those people in those communities that were directly impacted by the 40 years war on drugs, and then out of business opportunities, down for folks to parachute into a community and say, ‘Oh, I’m a social [equity] applicant simply because I’m in one of those designated areas.’

The Union: So you’re aware that there are those who were able to get this license but are not really qualified to get them?

Bradford: Without a doubt. I mean, we’ve challenged that for quite some time. I mean, on the local and state level we’ve brought that to their attention.

The Los Angeles County Sheriff’s Department raids an unlicensed dispensary on Imperial Highway in South Central Los Angeles. Customers and workers say the underground economy will continue due to barriers that prevent participation in the licensed industry. Photo by Kim McGill

Hawthorne and the City of Los Angeles are the only areas in the South Bay implementing legalization of marijuana as passed by 57% of California voters in 2016. Hawthorne has just begun its permitting process. Products there are not yet available.

The dark gray areas of the map — Inglewood, Gardena, Lawndale, El Segundo, Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, Harbor City, Lomita, Rolling Hills Estates and the unincorporated areas of LA County — prohibit all commercial cannabis as well as home growing for personal use.

Communities in the City of LA (Harbor Gateway, Wilmington and San Pedro) and Hawthorne allow medical MJ dispensaries and deliveries. Carson allows manufacturing. Rolling Hills allows medical shops and deliveries. Palos Verdes Estates allows deliveries.

The cities of LA, Carson and Hawthorne allow delivery of products for recreational use.

The cities of LA and Hawthorne allow shops selling cannabis products for recreational use Hawthorne is just starting, so stores aren’t open yet.

The cities of Carson and LA allow manufacturing of MJ products for both recreational and medical use.

got weed?

ACCESS TO CANNABIS IN THE SOUTH BAY

UNINCORPORATED LA COUNTY: LENNOX

Unincorporated areas of LA County also include areas too small to see on this map: Alondra Park between Gardena and Lawndale, Del Aire west of Hawthorne, and Westmont and West Athens north of Gardena. In all those areas, growing for personal use as well as all cannabis businesses are prohibited.

UNINCORPORATED

ROLLING

HILLS ESTATES

1 2 3 4

1. State law allows the growing of up to six plants for personal use. But, only the cities of LA, Hawthorne, Carson and Rolling Hills allow it. Rancho Palos Verdes requires a city permit. 2. Cultivation of cannabis for commericial sales is allowed in the City of LA and Carson. Most occurs indoors in large industrial spaces repurposed for growing. 3. California’s licensed cannabis industry generates under $5 billion a year. If the state’s marijuana economy was performing as well as Montana’s or Michigan’s, California’s annual market would be $13 billion. 4. California has 83,000 jobs in the licensed cannabis industry, far short of the 133,000 jobs that are currently possible.

Data sources: Local licensing — California State Department of Cannabis Control. Annual revenues — MJ Moment. Jobs — Vangst. Infographic by Kim McGill