Feds on the Lookout for Corruption in the Cannabis Industry

FBI officials are soliciting tips from the public on suspected illegal licensing of cannabis businesses and corruption by local officials.

As state and local marijuana policies continue to evolve in the United States, the Federal Bureau of Investigation (FBI) is seeking tips on corruption emerging from the rapidly-growing cannabis industry.

FBI officials asked for public input on August 15 in “FBI, This Week” a podcast released by the federal agency. During the brief podcast, FBI Public Affairs Specialist Mollie Halpern said as local governments continue to approve and distribute cannabis licenses, threats of corruption are beginning to escalate, especially in the western regions of the country.

“States require licenses to grow and sell the drug—opening the possibility for public officials to become susceptible to bribes in exchange for those licenses,” Halpern said. “The corruption is more prevalent in western states where the licensing is decentralized—meaning the level of corruption can span from the highest to the lowest level of public officials.”

Intelligence Analyst David Kirschner contributed insight during the podcast, explaining that as recreational marijuana becomes legal in more regions, states should anticipate an increase in corruption problems.

“It’s our role as the FBI to help to ensure that the corruption doesn’t spread in this new industry.”

Marijuana sales are expected to triple to $30 billion by 2023, and people are willing to pay extreme amounts for access to the cannabis industry. With the power in the hands of local public officials, bribery can become an issue. FBI officials have reported local cannabis licenses going for as much as $500,000.

Marijuana Corruption Cases in California

The Los Angeles Times reported in March that corruption was already a problem in the California cannabis industry. According to the news report, in the two years since voters approved legalizing recreational cannabis, a half-dozen government corruption cases had been reported.

Of those cases, several involved cannabis sellers bribing or attempting to bribe government officials. Those who were allegedly involved include a mayor pro tem in the city of Adelanto, a Humboldt County building inspector, a field representative to former Rep. Janice Hahn, and a developer offering Oakland city officials a free trip to Spain.

Cannabis Competition

Opportunities for corruption often appear in the gray areas of emerging industries. In a Forbes report, Morgan Fox, media relations director of the National Cannabis Industry Association, stated that “competition belongs in the market, not in the license application process.”

Fox also stated that while he didn’t see marijuana-related public corruption as an “especially prevalent problem,” changes would be beneficial.

“An easy way to avoid corruption becoming an issue is to get rid of arbitrary license caps and lower the barriers of entry for the industry,” Fox stated. “Not only would this make it easier for small businesses and people from marginalized communities to enter the industry, but it stops licenses from being treated as limited commodities that are so valuable that people may be willing to obtain them through unethical means.”

The FBI has asked anyone who suspects illegal licensing or corruption to report it to the local FBI field office.

Keeping Up With Cannabis

See which states have legalized medical and recreational marijuana on our ‘Where is Marijuana Legal?” page. Learn more about the latest news in cannabis policy, business and scientific research on our news page.