By Michael Sassano, CEO and founder, Somai Pharmaceuticals
Around the globe, raids on illicit cannabis grows and distribution channels are sounding the alarm about the dangers of the unlicensed market—and raising serious questions about why proper regulation is still lagging behind demand.
From the United States to Portugal, and as far as Thailand, cannabis raids are still commonplace. Recent headlines from California underscore a global truth: After more than two decades of legalization, the unlicensed cannabis market is not only alive—it’s evolving, thriving, and directly competing with licensed businesses. The licensed sector isn’t winning, and the consequences are human.
Cannabis Raids in California Exemplify the Problem
California was the original pioneer of medical cannabis and later recreational legalization. The state boasts more dispensaries than McDonald’s locations and some of the world’s finest flower. On the surface, it’s a consumer paradise. But insiders know the legal industry has been fractured for years.
Despite California’s robust legal framework, a thriving illicit market continues to flourish. The most recent major cannabis bust—where unlicensed growers were exploiting undocumented immigrants and committing egregious human rights abuses—should have ignited a bipartisan firestorm. Instead, it’s been reduced to a political pawn.
Corruption and Exploitation in Unlicensed Cannabis Grows
The raids have uncovered operations run by cartels, employing children, avoiding taxes, and funneling government funds—yet the deeper systemic issue is rarely addressed. Why does the illegal market still exist? Because overregulation, crushing taxes, and poor federal leadership have made legal participation almost impossible for many.
Why Is the Unregulated Market Still So Prominent?
Industry experts have shouted the truth for over a decade: The system is broken. Over-taxation and rigid restrictions have created an environment where legal operators are forced to choose between bankruptcy and bending the rules to survive. Some even make “backdoor” illicit sales to keep the lights on.
Lobbyists for Big Pharma and Big Alcohol have also worked behind the scenes to stall reforms, fearing competition in markets where legal cannabis drives down opioid and alcohol consumption. And while federal banking reform like the SAFER Banking Act remains stalled in Congress, illicit sales continue unfettered.
Global Cannabis Markets: Lessons in Regulation
California isn’t alone. Across the world, countries are wrestling with unregulated cannabis chaos.
Portugal and Spain offer cautionary tales. In Spain, social cannabis clubs legally serve members—but can only procure flower from illicit sources, fueling underground networks. Portugal, with even less regulatory oversight, has seen illegal product from social clubs and grows bleed into European distribution.
Meanwhile, Germany is taking a different path. With a billion-euro cannabis market on the horizon, the country has removed cannabis from the narcotics list and introduced relaxed legislation that’s already driving economic growth.
In Thailand, an initial greenlight for liberal cannabis access led to a booming—but mostly unregulated—market. Now, with billions in revenue and thousands of illicit grows, the government is trying to reimpose control. But the genie may be out of the bottle.
Where Does the Cannabis Industry Go From Here?
It’s time to stop asking if cannabis should be legal. It already is in most places. The real question is how to create a global regulatory framework that fosters transparency, supports small businesses, prevents exploitation, and removes criminal elements from the supply chain.
The human cost of ignoring these issues is no longer theoretical. Children are being trafficked. Workers are abused. Cartels grow stronger while compliant businesses fold.
The cannabis industry began with a dream: Healing, freedom, justice. Now it faces a crossroads. Will governments rise to the occasion—or continue enabling the same broken systems that created this crisis in the first place?
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