Few Americans are aware of the extent to which Chinese Transnational Criminal Organizations (TCOs) have infiltrated the cannabis (more colloquially known as marijuana or pot) market in the United States. By purchasing and leasing property in the U.S., Chinese TCOs have exploited the state-lawful, domestic U.S. cannabis industry in ways that legalization advocates never foresaw and have not yet admitted. 

The Expanding Illicit Market 

According to the Whitney Economics Organization, “of the $105 billion in Total Market Demand only $28.8 billion of demand was satisfied through legal state regulated channels.” That means nearly three-quarters of all cannabis activity in the U.S. is illegal. This enormous market has created an ideal operating environment for organized crime.

Although cannabis remains illegal under federal law, different state policies have produced a maze of inconsistent rules and enforcement gaps. Chinese TCOs have exploited these gaps by setting up state-lawful grow operations that avoid regulations or operate entirely outside of them.

According to the Drug Enforcement Administration’s 2025 National Drug Threat Assessment, Chinese and other Asian criminal groups “pretend to operate under business registrations granted by state licensing authorities in jurisdictions where marijuana cultivation and sales are ‘legal’ at the state level.” In other words, legalization has created a defense for the very criminal networks it sought to eliminate. 

Another factor contributing to this black-market expansion is access to cheap land. States with low property costs and weak oversight have become prime targets for Chinese infiltration. Criminal networks acquire land through intermediaries and shell buyers, transforming rural properties into massive grow sites.

This ability to physically root operations in American soil gives the criminal organizations cover and control over the production and distribution chain.

Land and Property: The New Frontier of Infiltration 

Oklahoma became an attractive state for illicit “grow houses” due to the cheap land and loose regulations. These factors resulted in Oklahoma accounting for   66% of the total amount of cannabis seized by the DEA in 2024, proving how TCOs have been able to use property to grow illicit drugs, process them, then use the site as a distribution point. 

Chinese organized crime’s ability to secure these large-scale land acquisitions stems from personal networks built around transferring Chinese capital out of domestic banks and into the United States. Sometimes, undocumented Chinese immigrants are the TCOs most useful tool, as the organizations lure them into the U.S. using false promises such as legal employment. 

TCOs have been able to take advantage of the fact that the federal law doesn’t require, in detail, the identification of all the different entities that have an interest in particular property. This lack of transparency allows criminal groups to conceal their involvement in land purchases through layers of intermediaries in states with lax regulatory schemes.

Congress should consider adopting a uniform federal standard that mandates full disclosure of beneficial ownership. The absence of such a mandate allows criminal organizations to exploit the inconsistencies of state laws thereby gaining power to launder money and acquire assets from selling cannabis while obscuring the true source of their funds.

Legalization of Cannabis 

Those who advocate for the legalization of cannabis believe that it would eliminate the black market of illicit drugs. Yet, history has consistently debunked this argument. In 1996, Californians voted to permit the use of cannabis for medical purposes under state law.

After that development, many states followed California’s lead. The National Conference of State Legislatures has stated that 40 states allow the medical use of cannabis as of June 26, 2025. Additionally, 24 states allow or regulate cannabis for non-medical use.

Once again Oklahoma became a hot spot following the passage of State Question 788 in 2018, which legalized the use of medical cannabis. This fall, the Oklahoma Bureau of Narcotics stated that it seized 18,585 cannabis plants during a raid on an unlicensed grow operation identified as “Wyatt’s Green LLC.” Additionally, they confiscated 1,785 pounds of processed cannabis, proving that what may look like a local farm is, in many cases, a node in a global criminal network.

This example illustrates the survival of the black market. Unlicensed growers are not required to pay the taxes levied on licensed businesses. Unlicensed cannabis businesses also do not comply with environmental and labor regulations that increase operating costs for regulated firms. These illicit operations exploit labor, land, and legal loopholes simultaneously, allowing them to undercut prices and dominate regional supply chains.

By operating through these gaps, TCOs have the power and luxury to sell cannabis at a lower price than state-regulated businesses, making their products more attractive to consumers and undermining legitimate markets.  

States must acknowledge the unsettling truth that legalization will not eliminate a black market. State legislators also should not encourage the legalization of cannabis under their own laws.

Conclusion 

Chinese organized crime has made a direct assault on U.S sovereignty, security, and the integrity of its laws. Every loophole in state regulation, every unverified land purchase, and every “legal” grow operation that escapes scrutiny strengthens the financial networks of dangerous adversaries operating within our border.

Combating this crisis means more than eradicating these gray areas; it means refusing to let greed and complacency decide who controls American soil. The question is no longer whether the legalization of cannabis works; it’s whether we are willing to protect our nation from those who use our laws as opportunities for profit that harms the nation.

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