San Diego has successfully shut down nearly every illegal pot shop in the city during a crackdown launched in spring 2016, but that’s prompted an explosion of illegal marijuana delivery services that present new challenges for authorities.
Officials say the roughly 100 illegal delivery services operating in the city use unmarked cars, conceal their storage sites and don’t operate from any location for very long.
“Delivery services will pose a much more lengthy investigative process due to their mobility and multiple storage locations,” Police Lt. Matt Novak told the City Council’s Public Safety and Livable Neighborhoods subcommittee this past week.
Marijuana legalization opponents say the crackdown on illegal pot shops was arguably counterproductive because it has pushed the city’s black market further under the radar just as legal sales of recreational marijuana are about to begin on Jan. 1.
While the illegal pot shops were magnets for crime and they flouted zoning rules and city safety regulations, they were easier for authorities to monitor than illegal delivery services.
And the delivery services are viewed as just as large a competitive threat to San Diego’s 17 legal dispensaries as the illegal pot shops were.
Both tend to charge lower prices than the legal shops because they don’t pay the same city fees as the legal shops and they aren’t subject to the same city regulations.
And that price differential will increase significantly next month when many of the legal dispensaries, which now sell medical marijuana, begin also selling recreational marijuana, which is subject to new state and city taxes.
“Our industry is very much dependent on your enforcement efforts to keep us viable,” Phil Rath, spokesman for the city’s legal dispensaries, told the council subcommittee. “Our prices are higher than the black market and consumers choose where to buy based on price.”
Rath said his group, the United Medical Marijuana Coalition, supported the 5 percent city tax on recreational marijuana (approved by voters in November 2016) partly to help the city crack down on illegal deliveries.
He urged the City Council to use revenue from the tax to give local police and City Attorney Mara Elliott all of the resources they request for enforcement efforts on deliveries and other illegal activity.
Don’t miss our reviews of strains, vape oils and other cannabis products.
Novak, the police lieutenant, expressed confidence the city would eventually find ways to shut down the delivery services through trial-and-error enforcement efforts similar to how they finally got a handle on the illegal pot shops.
“If they continue to operate in the city, they will face the same fate the illegal storefronts faced,” said Novak, who heads the Police Department’s narcotics unit.
It took eight years of ups and downs to shrink the number of illegal shops from a high of more than 300 to only two — and city officials say they are on the verge of also closing those two.
The key shift in strategy came in April 2016, when the city added criminal prosecutions of pot shop operators and their landlords to ongoing efforts to close the shops with civil injunctions based on zoning violations.
“For years, civil litigation against dispensaries failed to shut them down, so we shifted to the use of search warrants and criminal prosecution,” Novak said.
The city received more than $8 million in civil penalties over the years from shutting down about 600 illegal pot shops.
Since shifting the focus away from illegal shops to illegal deliveries in August, city officials have relied primarily on tips from residents and merchants near where deliveries originate, Novak said.
Police have also randomly spotted delivery vehicles on occasion, he said.
The city has already shut down two delivery services, one on Pembroke Street near San Diego State and one on Kurtz Street in the Midway District, resulting in 19 arrests, the confiscation of many marijuana plants and more than $35,000 in cash.
A third delivery service is under investigation, Novak said.
Based on the popular site weedmaps.com and data tracked by marijuana opponents, there are roughly 100 illegal delivery services operating in San Diego.
The City Council boosted enforcement last spring by approving legislation that says the only businesses legally allowed to deliver marijuana in San Diego are legally approved dispensaries, and requiring that all deliveries originate from one of those dispensaries, said Deputy City Attorney John Hemmerling.
Before that move there was some lack of clarity whether delivery services were legal or illegal, with some delivery services saying their businesses were permitted under the state’s legalization of medicinal marijuana in 1996.
Hemmerling said the city is also exploring some new strategies, such as working with weedmaps.com to gather information on illegal operators and declaring illegal businesses a nuisance to gain greater enforcement powers.
Similar to cities that work with Airbnb to get data on people flouting short-term rental regulations, Hemmerling said the city could work with weedmaps.com to get data on illegal deliveries.
He said such a partnership might be announced in coming months.
City officials said they also plan to have undercover officers begin requesting deliveries.
Marijuana opponent Scott Chipman, who leads a group called San Diegans for Safe Neighborhoods, said he’s pleased the city finally figured out how to shut down illegal pot shops.
“Every step in the right direction is a good one,” he said.
He said it’s frustrating that more elusive delivery services have essentially taken their place, expressing doubt that city officials can effectively shut them down.
“A lot of these stay under the radar because they built up a clientele when they were operating illegally,” Chipman said.
They don’t need to advertise on the web or anywhere else because they have thousands of existing clients and continue to get more by word of mouth, he said.
Councilman Chris Cate, chairman of the council’s public safety committee, vowed to focus next year on aggressively regulating marijuana businesses, both legal and illegal.
He said to expect a crackdown on advertising by legal dispensaries in inappropriate locations, especially billboards.
And he said potential methods for cracking down on deliveries will be a priority.
© 2017 The San Diego Union-Tribune. Visit The San Diego Union-Tribune at www.sandiegouniontribune.com. Distributed by Tribune Content Agency, LLC.