Tolerance of cannabis is growing just as scientists show that it can cause insanity
October 9, 2021
Legalising and commercialising cannabis is well underway from Uruguay to Canada and in at least 10 states in the US. Paradoxically, this shift towards the toleration of cannabis as more-or-less harmless is taking place just as scientists conclusively prove the link between cannabis and psychosis (a less shocking word than “madness” or “insanity”, but the meaning is the same). Cause and effect is today as well established as it is between cigarette smoking and lung cancer.
“Numerous prospective studies have shown that cannabis use carries an increased risk of later schizophrenic-like psychosis,” says an article by Sir Robin Murray of the Institute of Psychiatry, Psychology and Neuroscience at King’s College London and Wayne Hall of the National Centre for Youth Substance Use Research at the University of Queensland. They cite a study showing that, though Portugal is held up as a pioneer in dealing with drugs, the rate of hospitalisation for psychotic disorders has increased 29-fold since decriminalisation 15 years ago. Another study calculates that between 30 per cent and 50 per cent of new cases of psychosis in London and Amsterdam would not have occurred if the individual affected had not been smoking high-potency cannabis.
Personal observation confirms this: doctors in mental hospitals have told me that they scarcely bother anymore to ask patients if they have taken cannabis, but simply assume it is the case. The situation has deteriorated as the proportion of THC, the psychoactive substance in cannabis producing the “high”, has risen precipitately. Once as low as 3 per cent it has risen to 10 to 15 per cent in Europe and North America, though in Colorado, the first state to legalise recreational use, the THC can reach as high as 70 per cent. Those taking cannabis daily, particularly if they are young, face an escalating risk of permanent mental breakdown.
But if cannabis has already had its “tobacco moment”, when the damage it does is scientifically proven, why do celebrities like Justin Bieber want to destigmatise it and persuade consumers that it will improve their mental health?
The cigarette industry did this a century ago, funding “independent” experts that sought to blur or discredit evidence that smoking caused cancer. Governments were seduced by high tax revenues from tobacco sales and reluctant to do anything to curtail them. Hollywood stars like John Wayne, Clark Gable and Spencer Tracy happily – and profitably – glamourised cigarettes, much as is happening to cannabis now.
Businesses seeking to emulate the tobacco companies at the height of their profitability have formed a bizarre de facto alliance with liberals and progressives, who are appalled by the disastrous mess created by government drug policy. The so-called “war on drugs” has demonstrably inflicted more misery in the US, certainly on the black community, than real military conflicts.
But an over-reaction to government failure provoking a dash in the opposite direction has equal dangers. Those in favour of greater tolerance towards drugs are almost invariably thinking of cannabis as much less nasty than heroin and cocaine. But I have met psychiatrists, with long experience of dealing with drug victims of all sorts, who believe that cannabis is more dangerous than the other drugs because it has the potential to damage many more people.
The legalisation of cannabis will do nothing to hurt organised crime groups, but it will make the drug much more widely available. The idea by proponents of legalisation that the government will tightly regulate its quality and sale is naïve. If the authorities cannot control it when it is illegal, they will be even less able to do so when it is legal. But legalisation – and even limited decriminalisation – will send a message that taking cannabis is a benign activity and does not do you or anybody else much harm. The deterrent effect of illegality will evaporate and the drug becomes no different than alcohol and tobacco.
Once commercially available, all the old persuasive tools formerly used by the cigarette industry swing into action as is happening unstoppably in the US. Celebrities like Justin Bieber will “destigmatise” the drug and give it the gloss of youth and fashion. Once the victims of the tobacco companies coughed up their lungs unnoticed by the wider community, and this time round the victims of cannabis will disappear into mental hospitals without anybody taking much notice.
Those with a recorded history of cannabis use in general practice records are at a much higher risk of developing mental ill health problems such as anxiety or depression as well as severe mental illnesses, new research shows.
The findings point to the need for a public health approach to the management of people misusing cannabis, including the need to emphasise the importance of general practitioners to continue enquiring about recreational drug use.
While the links between cannabis use and severe mental illnesses such as schizophrenia and psychosis are well researched, the associations are less clear between cannabis use as described in patient’s GP records and other, more common types of mental ill health such as depression and anxiety.
In a new study, published in Psychological Medicine, researchers in the University of Birmingham’s Institute for Mental Health and the Institute of Applied Health Research found a strong link between general practice recorded cannabis use and mental ill health in one of the largest cohorts ever explored.
Senior author Dr Clara Humpston said: “Cannabis is often considered to be one of the ‘safer’ drugs and has also shown promise in medical therapies, leading to calls for it be legalised globally. Although we are unable to establish a direct causal relationship, our findings suggest we should continue to exercise caution since the notion of cannabis being a safe drug may well be mistaken.”
Dr Joht Singh Chandan said: “The research reaffirms the need to ensure a public health approach to recreational drug use continues to be adopted across the UK. We must continue to progress measures to improve the prevention and detection of drug use as well as implement the appropriate supportive measures in an equitable manner to prevent the secondary negative health consequences.”
Despite widespread reports of smuggling, state investigators revoked zero distribution licenses in 2020, Leafly has learned. (Leafly)
Cannabis prohibition might be ending. But the era of cannabis bootlegging seems to have just begun.
According to an official with the California Department of Cannabis Control (DCC), on Sept. 7 state investigators surprise-inspected the office of Blue Tree LLC, a licensed cannabis distribution company in Oakland, CA.
The action came after an anonymous tip from a whistleblower alerted DCC officials to a possible smuggling operation involving tens of thousands of pounds of cannabis potentially moving into the illicit market over the past six months.
In 2021, America’s roughly $25 billion legal cannabis market still pales beside the estimated $50 billion total spent on cannabis in the US. Much of that market is fed by illicit growing. But a slice of it comes from legal growers who are—knowingly or unknowingly—selling their harvest to state-licensed distributors moving tons of weed out the back door.
Tipster comes forward
The whistleblower, who is familiar with Blue Tree’s operations, reported the alleged diversion to Oakland officials earlier this summer, and tried to make a report to the state’s now-defunct Bureau of Cannabis Control. That state agency has since been folded into the larger Department of Cannabis Control.
In late August, the same tipster contacted Leafly with statements and Blue Tree shipping reports filed into California’s cannabis track and trace system, known as METRC. Looking at Blue Tree’s METRC activity, the whistleblower claimed that the activity represented “rampant, massive, organized fraudulent diversion.”
Blue Tree started in 2019 when founder and social equity applicant Joshua Jones went to the front of the line for a legal permit. Jones obtained the standard dual-licensing in 2019—first a local Oakland equity license as a distributor, with a corresponding state license for the same.
But Blue Tree did not use its license, the tipster alleged. No METRC activity existed until Feb. 9, 2021, when inbound manifests started reporting serious weight moving into the tiny, dusty workspace, the tipster told Leafly.
If Blue Tree is conducting its business in compliance with state law, the tipster’s documents indicate that the distributor should be currently warehousing tens of millions of dollars of cannabis products.
Inbound orders averaged several per day, sometimes 500 pounds of cannabis for a safe that could hold about 30 pounds maximum.
One inbound order, #2025450 on June 4, listed almost two tons of flower and leaf.
Five inbound transfers alone in May totaled one ton of flower.
A Leafly review of Blue Tree shipping manifests found major anomalies—over 800 orders came in, but just a few dozen went out.
Leafly visited the Blue Tree workspace recently. It’s a bedroom-sized sub-lease locked in the back of an Oakland warehouse. Empty grey plastic flower bins sat next to a disheveled desk. Bare metal racks lined the walls. Empty, blue plastic product divider bins sat in piles on the floor. A locked closet in the back held a small, fridge-sized safe that could secure maybe 30 pounds of flower.
Blue Tree’s distribution license remains listed as ‘active’ on the BCC website. Despite Leafly’s repeated attempts to reach Blue Tree officials, no one returned calls, text messages, or emails sent to the license’s contact information. The company’s voicemail box is full.
How does a burner distribution license scheme work?
McGowan, as well as other industry experts who spoke to Leafly on background, confirmed the broad outline of the scheme. It involves loading up a legitimate distribution license with a bunch of inbound legal pounds in METRC, diverting the weed into the street market, and then letting the distribution license lapse (burning it), before starting another one.
State regulators have not been watching the industry adequately, experts say. Above, distribution vans outside the Blue Tree office complex. (David Downs/Leafly)
Steps to the burn
Here’s a general outline of a burner license operation:
An illicit market middleman (called a broker) finds a desperate or naive individual who either already has a distribution license, or who can pass a background check and can act as the applicant for a distribution license.
They rent commercial office space in an industrial part of town zoned for cannabis, and obtain a local municipal license. Distribution licenses are considered the cheapest and easiest to get, unlike retail or farming, which can be more controversial activities with neighbors.
After securing the local municipal license, the company secures an official state license—again, with distribution being the easiest license type to obtain.
At this point, an illicit broker effectively has a distribution license. This allows them to purchase huge amounts of weight from any legal cannabis farm in the state.
The broker buys up weed from the farms, filing METRC reports, and promising to pay their cultivation taxes.
Instead of selling the weed to licensed retail stores and paying cultivation and excise taxes, however, the company ships the weed to illicit East Coast buyers. No taxes are paid.
Instead of reporting the sale in METRC, the distributor either never files an outbound report, or reports the cannabis as “damaged,” “lost,” or lists it as having $0 value or “N/A.”
The crew keeps moving weight until the license’s annual renewal comes up.
Company officials allow their license to expire, and switch over to another burner license they’ve obtained.
The scheme relies on the fact that state cannabis regulators don’t have the resources to monitor all companies and all METRC reports. By the time a regulator does notice the anomalies, the license holders are long gone.
Why would you burn a distribution license?
Burning a license is a profitable scheme, if you don’t get caught.
The farmer legally sells his crop, as the distribution license itself is legitimate and the farmer may or may not be aware of the burner scheme.
The distributor, broker, and street seller all mark up the marijuana and profit off the trafficking without paying any state or federal tax. Burner license holders often participate because they’re strapped for cash, said McGowan. Tax payments are astonishingly high for legal, licensed companies in California. And that’s before the federal government demands its take, which is astronomical due to the notorious IRS Rule 280E.
Add to that the fierce competition faced by many in the California market, where deep-pocketed competitors have the means to wait out long stretches of unprofitability. The price of legal cannabis is currently tumbling from prohibition highs to commodity lows. Many cannabis farmers are happy to move product, even if their harvest may never see a legal shelf. Other farmers need to report some legal sales as a cover for the illicit growing they’re also doing.
And all of this is happening against a background of lax and underfunded regulatory enforcement. State regulators simply don’t have the resources to keep a sharp eye on every single distribution license.
“It’s systemic failure,” the Blue Tree whistleblower told Leafly.
“It’s just getting stupid” said Elliott Lewis, CEO of Catalyst Cannabis in Long Beach. Lewis is a long-time licensed cannabis operator. “All the weed is getting offloaded into [the illicit market].”
Enforcement was lacking
After more than three years of legal cannabis sales in California, the enforcement picture is not impressive.
According to the DCC, state inspectors conducted only 50 inspections of 1,179 distributor licensees in 2020, due to COVID-related constraints.
Regulators issued seven letters of non-compliance, and did not revoke a single distribution license in 2020.
In 2019, the BCC revoked 15 distribution licenses, and none for diversion.
At the local level, Oakland could not even say what enforcement they have done or are doing. City Administrator Ed Reiskin has failed to publish timely cannabis regulatory enforcement reports. Officials with Reiskin’s office said they do not have the data on hand.
Number of licensed California cannabis distributors: 1,179 Distribution licenses revoked in 2020: 0 Distribution licenses revoked in 2019: 15(Source: CA Dept. of Cannabis Control, 2021)
State regulators have been hobbled by a number of issues.
They receive thousands of complaints each year, and are in the middle of merging three state agencies into one. The newly formed DCC—formed by combining parts of the Bureau of Cannabis Control, California Department of Public Health, and the California Department of Food and Agriculture—is less than two months old.
The department is not planning to issue full enforcement reports, like Colorado does, until March 2023.
Who’s getting hurt and why should readers care?
Burning a distribution license is not a victimless crime. Experts note that the scheme:
deprives legal consumers of supply, choice, and price competition
deprives unwitting legal growers of legal brand awareness and value
punishes legal competitors who are playing by the rules
and deceives investors, undermining the credibility of the licensed market.
McGowan said the burner scheme also preys on the “straw men” license holders who don’t know what’s truly going on, or are willing to be set up. She said burner distro schemes especially prey on social equity applicants, who may have less access to financing but do have greater access to the front of the licensing line.
Ultimately, the entire burner distribution license scheme exists because California legal cannabis taxes are too high and regulations are too onerous for the legal market to compete with the street, said Lewis, the long-time Long Beach, CA, operator and licensing veteran.
Some experts say California’s pioneering voter initiative to legalize cannabis clearly needs some fine-tuning after three-and-a-half years of legal sales.
“The reason burner distros exist is because the state system is so fucked up,” said Lewis, who operates seven licensed retail stores. “They created such a bad system, people have to use burner distros. I don’t hate on their game.”
“They have an oppressive tax rate that’s a total failure.”
Dalgarno Comments: This is just one of the predicted outcomes foreseen by any non-cannabis using clear head. The failed promise that once Cannabis was legalized the following would eventuate
‘Black market’ would all but disappear, and criminals would no longer make money from cannabis (yet the black market grows, now giving us two massive markets ‘regulate/police’)
Massive savings in ‘law enforcement’ and criminal justice would fill the state coffers, whilst gleaning a massive tax revenue. (Instead, we have increasing white collar and organized crime, with the demand for enforcement growing, not diminishing – and again into two markets not one.)
Safer product that will not be diverted – (the market is flooded with unsafe product, and diversion is rife.)
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