Lawmakers Debate Whether Marijuana Legalization Helps Or Hurts Organized Crime At Hearing On Chinese-Linked Illicit Grows

A GOP-led House committee held a hearing on Thursday focused on Chinese
criminal organizations behind large-scale illicit marijuana grows, taking
testimony from a group of law enforcement officials and a researcher who
each attempted to link the issue to state-level legalization.

But one Democratic lawmaker took the opportunity to make the case for
cannabis rescheduling and broader federal reform to mitigate the issue.

The House Homeland Security Subcommittee on Oversight, Investigations, &
Accountability hearing was titled “Invasion of the Homeland: How China is
Using Illegal Marijuana to Build a Criminal Network Across America.”

While there was some talk among experts and lawmakers about differentiating
state-sanctioned cannabis cultivation from the illicit market, the
conversation largely skewed prohibitionist. Witnesses included a former
Drug Enforcement Administration (DEA) agent, top Oklahoma law enforcement
official and a researcher with the conservative Heritage Foundation think
tank.

The subcommittee chairman, Rep. Josh Brecheen (R-OK) said in his opening
remarks that “we’ve enabled these foreign organizations with potential
links to the [Chinese Community Party, or CCP] to build up a sophisticated
network throughout the United States, which facilitates a wide range of
other criminal activity and presents a national security threat.”

“This is a convergence of organized crime, human drug trafficking, public
health risks—all operating at scale and sophistication crossing the state
national lines beyond the normal capabilities of state and local law
enforcement to combat,” he said. “These agencies need the help of federal
law enforcement to unravel these criminal networks.”

Rep. Troy Carter (D-LA), however, spoke about the collateral consequences
of prohibition, saying the “federal government’s decision to criminalize
marijuana has been nothing short of disastrous for our communities, for our
economy and for justice in America.”

“The failed war against cannabis has especially devastated Black and brown
communities. Arrest and incarceration rates for marijuana offenses have
been wildly disproportionate,” he said. “Today, with most Americans
supporting legalization, it is past time that we acknowledge the truth:
Marijuana prohibition has failed.”

“If we want to dismantle foreign criminal networks and protect American
communities, then we need to strengthen, not weaken, regulated markets,”
Carter said.

The congressman also noted that “even President Trump has expressed support
for rescheduling” marijuana at the federal level.

“Like President Trump, I believe we should end endless arrests for cannabis
conduct and focus on the real bad guys—those who are pushing fentanyl and
other deadly forms of drugs,” he said.

Rep. Marjorie Taylor Greene (R-GA) said that “Chinese TCOs have become
dominant in the U.S. illicit marijuana market, establishing highly
sophisticated, multi-state operations.”

“This is largely believed, especially in younger generations, that
marijuana is a good thing–that it helps relieve stress, helps them sleep at
night, and then there’s also people that use it for PTSD and have success
with it,” the congresswoman said. “There’s medical uses of marijuana, but
the American people have no idea that Chinese transnational criminal
organizations are involved and that it’s leading to other extremely
terrible and dangerous crimes.”

Donnie Anderson, director of the Oklahoma Bureau of Narcotics and Dangerous
Drugs Control said in his written testimony that he has “dedicated over 34
years to public safety and narcotics enforcement, and I can say without
hesitation that the impact of black market marijuana in Oklahoma is unlike
anything I have encountered in my career,” highlighting how his state’s
voter-approved medical cannabis law has “no limits on the number of grow
operations or the quantity of plants each could cultivate.”

“What is even more alarming is the growing influence and involvement of the
Chinese Communist Party (CCP) in this illicit industry,” he said.

“Oklahoma law requires marijuana business owners to be state residents with
at least two years of residency,” Anderson said. “Yet nearly all
Chinese-operated grows circumvent this requirement through fraud and straw
ownership. In one instance, a single Oklahoman was listed as the owner of
approximately 300 farms.”

“This widespread fraud is facilitated by consulting firms, real estate
agents, and attorneys who help establish these shell operations,” he added.
“Alarmingly, many of these grows are located near critical infrastructure,
including military bases and pipelines.”

Paul Larkin, a senior legal research fellow at the Heritage Foundation,
testified at the hearing that “Chinese organized crime has been able to
move into the American cannabis industry because—contrary to what cannabis
reform advocates have told us for the last 60-plus years—the legalization
of cannabis has not eliminated a black (or grey) market for that plant.”

“There are various steps that the states and the Executive Branch can take
to address this problem. For example, if a state has not yet adopted a
medical- or recreational use cannabis régime, the state should not do so,”
he said.

Christopher Urben, a former Drug Enforcement Administration (DEA) agent
said that, since the rise of the state legalization movement, “we started
seeing the proceeds get invested into marijuana cultivation and
distribution operations.”

“Legalization by states has been tied to the growth of illicit
Chinese-linked grow and distribution operations for several reasons,” he
said, asserting that high tax prices for cannabis in the legal market and
strict regulations “has allowed the black market for the drug to persist,
as it offers a less expensive product—untaxed marijuana grown without
regulation—delivered more conveniently, via street transactions or
unlicensed channels, and quickly than government-approved alternatives.”

He also said that, because legalization reduced or eliminated penalties for
cannabis possession and distribution, that “created a lawful channel” and
“reduced the risks to criminal actors, including CMLNs, of severe criminal
sanctions as a result of their unlawful operations, freeing them to invest
their illicit proceeds in marijuana grow and distribution operations.”

“Third, legalization increased marketplace demand by making it more
acceptable for consumers to use marijuana,” he said. “This helps support
the legal market for the drug, but it also increases the supply of
potential customers for black-market marijuana that is distributed by CMLNs
and other TCOs.”

Meanwhile, in a recent report attached to a House spending bill covering
Commerce, Justice, Science, and Related Agencies (CJS) bill, members
directed federal agencies to investigate illicit marijuana grows–with a
specific requirement to look into “any connections or links to Chinese
transnational criminal organizations and/or the government of the People’s
Republic of China.”

Sen. Chuck Grassley (R-IA) separately claimed in 2024 that there’s been a
proliferation of illegal cannabis activity in the U.S. associated with China.
And he also said that there were thousands of licensed medial marijuana
businesses in Oklahoma “flagged for suspicious activity over the last year
had a Chinese connection.”

Sen. Susan Collins (R-ME) has also repeatedly raised concerns with federal
officials at hearings about Chinese-linked cannabis grow houses in her
state.

Leveraging the increasing attention to the issue, the prohibitionist group Smart
Approaches to Marijuana (SAM) put out an ad in July arguing that if
President Donald Trump moved forward with a pending cannabis rescheduling
proposal, it would empower Chinese cartels.

In 2023, a major marijuana lobbying firm apologized after sending a letter
to Senate committee leadership concerning a bipartisan cannabis banking
bill that contained “inappropriate” references to investments from China in
a “misguided attempt” to push for amendments expanding the legislation.

It’s unclear why the House committee is choosing to address the issue now,
but it comes at a pivotal moment for federal marijuana policy developments.
Specifically, advocates and stakeholders are eagerly awaiting a decision
from the president on the proposal to move cannabis from Schedule I to
Schedule III of the Controlled Substances Act (CSA).


*— Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug
policy bills in state legislatures and Congress this year. Patreon
supporters pledging at least $25/month get access to our interactive maps,
charts and hearing calendar so they don’t miss any developments.*


*Learn more about our marijuana bill tracker and become a supporter on
Patreon to get access. —*

The House Appropriations Committee last week passed a spending bill that
contains provisions to block the Justice Department from rescheduling
marijuana.

Also last week, the House Oversight and Government Reform Committee
approved a bill to repeal a Washington, D.C. law expanding expungements for
marijuana possession.

*Photo courtesy of Chris Wallis // Side Pocket Images.*

The post Lawmakers Debate Whether Marijuana Legalization Helps Or Hurts
Organized Crime At Hearing On Chinese-Linked Illicit Grows appeared first
on Marijuana Moment.