Article by Robert Bryce, Forbes
Today, April 20, is Weed Day, and lots of imbibers are celebrating (while social distancing) with their favorite strains of cannabis. But even amid the ongoing wave of marijuana legalization – 11 states have legalized recreational use and 33 states permit medical use – it’s also apparent that the marijuana industry has an electricity addiction. That addiction has resulted in an epidemic of electricity theft by black-market growers that is costing electric utilities in the U.S. and Europe untold millions of dollars per year.
Over the past month, police in California have busted three illicit grow operations all of which were stealing electricity. The busts occurred in Perris, where the growers stole about $120,000 of electricity, Rancho Cucamonga ($88,000), and Temecula, ($11,000). In February, the Riverside County Sheriff’s Department busted an illegal grow operation that was estimated to have stolen $202,000 worth of electricity.
Indeed, even as the legal weed industry which tallied some $12 billion in sales in 2019, has become more respectable – most of the states that have legalized cannabis have deemed marijuana dispensaries as “essential” businesses during the coronavirus quarantine – electricity theft by illicit growers continues to be a significant problem.
That’s particularly true in California, which legalized recreational use in 2018. Despite legalization, as much as 80 percent of all marijuana sales in the state are still happening in the black market. Last year, a Chinese organized-crime ring was busted after investigators found seven marijuana grow houses in Chino, Ontario, and Chino Hills. All of them were stealing electricity. Last July, an illicit grow in Visalia was discovered after police received a tip that the house had illegally tapped the electric grid. The Visalia Police Department arrested two men who had allegedly stolen some $80,000 worth of electricity. In August 2018, police busted four homes in Murrieta and arrested eight people for growing illicit weed. The value of the stolen electricity was estimated at $200,000.
Last September, law enforcement officials in Pasco County, Florida busted an illegal marijuana grow operation that was stealing electricity. The value of the pilfered power was about $12,000. Over the past few years, illicit pot growers in Michigan, New Jersey, and New York have been nabbed for stealing electricity.
Electricity theft is also common in Europe. Last month, Netbeheer Nederland, the trade association for Holland’s electricity- and gas-grid operators, said some 2,300 illicit marijuana grow operations busted in the country in 2019 were being run on stolen electricity. The stolen energy was estimated to be worth some 60 million Euros, or enough juice to power all of the households in Rotterdam for a year. In 2017, Spanish police busted an illegal marijuana grow that had stolen some $500,000 worth of electricity.
Gangsters are stealing electricity for a simple reason: Electricity is often the biggest single expense for indoor growers, accounting for as much as a third of the cost of production. Thus, for illicit producers, stealing juice is a relatively easy way to turbocharge profits.
To be sure, not all illicit growers are stealing electricity. Nevertheless, their outsized electricity use can still lead police to their doorstep. In 2018, some 500 federal, state, and local law enforcement officials teamed up to raid about 75 residential properties near Sacramento that were being used as marijuana grow houses by organized-crime rings. Some of the grow houses were detected through their utility bills, which showed that they were using 30 to 40 times more electricity than other houses in the neighborhood.
In 2017, San Bernadino police raided a grow operation inside the old Pacific Bell building located about a block from the police department’s downtown headquarters. Police made the raid after looking up the building’s utility records and finding that the supposedly unoccupied building was racking up monthly electricity bills of $67,000. After the bust, a spokesman for the San Bernadino Police Department, told a local media outlet, “It’s pretty bold that they would have their operation so close to the station.”