Politics
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).
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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.
