Foreign cartels make big business of black-market marijuana in legal states

The workers often fly from China to Belgium, and from Belgium to Mexico, before making asylum claims at the border and then disappearing by the time they’re scheduled to tell their stories in court, Ladd said. Often when grow houses are raided, immigration fugitives are discovered, he said.

The grow homes are usually purchased by shell property management companies, Ladd said. “These growers can hide in plain sight,” he said.

How foreign cartels operate in the U.S.

The Sacramento-area raids, which also struck Calaveras, Placer, San Joaquin, El Dorado, Yuba and Amador counties, shed some light on how many of the foreign rings operate.

Northern California-based DEA Special Agent Casey Rettig said suspects send cash to the United States in $9,999 increments, just below the mandated reporting threshold, and receive funds from China that fly under that nation’s $50,000 foreign spending limit. They then purchase homes with the help of cash lenders instead of traditional mortgage firms.

Last fall, a scenario fitting that pattern unfolded in Grays Harbor County, Washington, southwest of Seattle, as a drug task force busted an alleged cultivation ring funded by organized crime in China.

More than 40 suspects were arrested and $80 million worth of cannabis was seized, the Grays Harbor County Sheriff’s Office said. “The majority of these homes were purchased with cash, and information was developed that these purchases were conducted by Chinese nationals involved in organized crime,” according to a statement from the Sheriff’s Office.

And just this month, search warrants were served at 19 locations in the Puget Sound area of Washington state, a federal official who did not want her name used said. The ring was allegedly run by three Chinese nationals who produced thousands of pounds of cannabis destined for greater New York, the U.S. attorney’s office in Seattle alleges.

The suspects, who face drug conspiracy charges, purchased homes with the help of multiple wire transfers from China that included dollar figures — $2,000 to $5,900 — they believed would fly under the radar, according to a federal complaint.

Marijuana plants found during a Drug Enforcement Administration raid in an illegal pot grow home in Colorado.Drug Enforcement Administration

Ultimately it was the houses’ exorbitant electricity use — up to 38,477 kilowatt hours in one day versus the American average of just 30 — that made them targets of a federal investigation, according to the filing.

Even a single grow house can contain a large marijuana operation. In April, police in Pomona, California, an exurb in Los Angeles County, announced they discovered a 23-room grow house allegedly run by Chinese nationals. Fifty-five-hundred marijuana products, including 2,900 plants and nearly 21 pounds of cannabis, were seized, police said.

“The grow operation used advanced systems of lighting, air conditioning, fans, exhaust blowers and air-filtering systems to control the climate inside the buildings and the odor of marijuana,” according to a Pomona police statement.

Pomona police spokeswoman Aly Mejia said a gun and $6,900 in cash were also found.

The DEA’s Rettig, speaking from her base in San Francisco, said the Chinese operations are “illegal under state law.” In California, marijuana growers, producers and retailers need state and local licenses. Cities can opt out and ban such businesses altogether.

Rettig said even with the Golden State’s sky-high housing market — the median price of a home is $535,100, according listings site Zillow — overseas criminals know that “marijuana can fetch three times as much out of state.”

“There’s a great profit motive in it,” the DEA’s Ladd said. “In Colorado, marijuana legalization has magnified the black market. The standard price per pound here is $2,000, but they can get $3,500 to $4,500 by shipping it back East. The profits are great there.”