San Diego Sets Sights on Illegal Delivery Services

After a year and a half of going after unlicensed cannabis dispensaries, San Diego authorities are stepping up enforcement against illegal delivery services, which local officials say have proliferated in response to the city’s continued crackdown on retail stores.

“Now that we’ve shutdown illegal storefronts, we’re seeing a barrage of illegal delivery services come online,” Chris Cate, a San Diego City Council member, told local KUSI news. “Now the attention has shifted from those illegal storefronts to illegal delivery services.”

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Earlier this month, authorities marked the shift with a splashy raid on a business operating out of the city’s Midway District. Police raided the facility on Aug. 2 and arrested 12 employees. They also confiscated more than 41 pounds of cannabis, 8,000 edibles and concentrate products, more than 100 cannabis plants, cocaine, $5,600 cash, and business records.

“This is our first delivery service case,” San Diego police Lt. Matt Novak told the San Diego Union-Tribune following the raid. Novak’s team in the police narcotics unit previously spent 18 months chasing unlicensed storefront dispensaries around the city, closing more than 60 so far. Delivery services, Novak said, “will receive the same enforcement we have been giving the dispensaries.”

Only a handful of dispensaries are currently licensed to operate in the city, KUSI reports. Local retail licenses allow these businesses—and only these businesses—to offer delivery services. But a quick online search shows dozens of other, unlicensed operators willing to drop off cannabis at a customer’s door. Some estimates put the number of illegal delivery services at 100 or more.

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Elizabeth Wilhelm, the founder of the nonprofit San Diego Cannabis Delivery Alliance, is one such delivery operator. While her group doesn’t have a local license to deliver, she told KUSI that she nevertheless aims to run an above-board business.

“We’re incorporated. We’re paying our state taxes, our federal taxes. We’re paying our sales  taxes. We’re paying our personal income taxes. We’re doing everything,” she said. “We’re not denying that there’s some bad actors in the bunch, and we as much as anyone support getting rid of them. It’s not what we want. It’s not what we’re about. We’re about taxation, regulation, and safe access. Period.”

Meanwhile, some of the already-licensed businesses say they’re just fine with the crackdown.

“We support the City Council’s decision to regulate the delivery system,” Will Senn, owner of Urbn Leaf dispensary, told KUSI. “We appreciate what they’ve done so far for the industry.”

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San Diego’s frustration isn’t unusual. Metro areas across California have struggled to eradicate illegal cannabis operations and limit cannabis activity to licensed businesses. But after nearly 20 years of scant regulation from the state, local authorities have been overwhelmed by the scope of the task.

In Los Angeles, for example, the city attorney’s office has spent the better part of two years targeting delivery services after working to eradicate illegal storefront dispensaries (only 135 operate legally in the city). Just as in San Diego, LA operators whose shops were shut down often simply reopened as delivery services, which proved harder for authorities to track down.

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San Jose, too, banned deliveries as part of its effort to winnow down the number of illegal cannabis businesses. It took local officials years of enforcement efforts to shutter the bulk of illegal operators.

In San Diego, officials didn’t officially ban delivery services until April. Prior to that, the city kept them in a gray area, allowing the services to operate but refusing to grant them business licenses. Officials announced in June that the city would begin to shift enforcement from illegal storefront businesses to deliveries, which left many operators exasperated.

Observers have been forecasting a clash between San Diego officals and unlicensed delivery services—the Voice of San Diego called it a “collision course—since at least January, when officials began considering an official ban on deliveries.

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