{"id":3014,"date":"2021-09-30T11:17:54","date_gmt":"2021-09-30T01:17:54","guid":{"rendered":"https:\/\/www.dalgarnoinstitute.org.au\/wp_site\/this-company-is-smuggling-tons-of-legal-cannabis-into-streets-whistleblower-alleges\/"},"modified":"2025-11-12T21:02:06","modified_gmt":"2025-11-12T10:02:06","slug":"this-company-is-smuggling-tons-of-legal-cannabis-into-streets-whistleblower-alleges","status":"publish","type":"post","link":"https:\/\/www.dalgarnoinstitute.org.au\/wp_site\/this-company-is-smuggling-tons-of-legal-cannabis-into-streets-whistleblower-alleges\/","title":{"rendered":"This company is smuggling tons of legal cannabis into streets, whistleblower alleges"},"content":{"rendered":"

David Downs<\/strong><\/a> September 21, 2021<\/p>\n

Despite widespread reports of smuggling, state investigators revoked zero distribution licenses in 2020, Leafly has learned. (Leafly)<\/strong><\/p>\n

Cannabis prohibition might be ending. But the era of cannabis bootlegging seems to have just begun.<\/p>\n

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.<\/p>\n

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.<\/p>\n

In 2021, America\u2019s roughly $25 billion<\/a> 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\u2014knowingly or unknowingly\u2014selling their harvest to state-licensed distributors moving tons of weed out the back door.<\/p>\n

Tipster comes forward<\/strong><\/p>\n

The whistleblower, who is familiar with Blue Tree\u2019s operations, reported the alleged diversion to Oakland officials earlier this summer, and tried to make a report to the state\u2019s now-defunct Bureau of Cannabis Control. That state agency has since been folded into the larger Department of Cannabis Control.<\/p>\n

In late August, the same tipster contacted Leafly with statements and Blue Tree shipping reports filed into California\u2019s cannabis track and trace system, known as METRC. Looking at Blue Tree\u2019s METRC activity, the whistleblower claimed that the activity represented \u201crampant, massive, organized fraudulent diversion.\u201d<\/p>\n

Blue Tree started in 2019 when founder and social equity applicant Joshua Jones<\/a> went to the front of the line for a legal permit. Jones obtained the standard dual-licensing in 2019\u2014first a local Oakland equity license as a distributor, with a corresponding state license for the same.<\/p>\n

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.<\/p>\n

If Blue Tree is conducting its business in compliance with state law, the tipster\u2019s documents indicate that the distributor should be currently warehousing tens of millions of dollars of cannabis products.<\/p>\n