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Gym bags stuffed with cash, 40 Rolexes and $1,000 bottles of wine.
An Alameda County sheriff’s deputy revved up a trimmer and began hacking through a thicket of marijuana plants — enough to fill several rooms of a warehouse in San Leandro and, eventually, scores of garbage bags.
The facility, a stocky industrial building near the Bay Trail and the Oakland airport, was among 18 locations that sheriff’s deputies raided this week in San Leandro, Oakland, Hayward and Castro Valley. A tip 18 months ago led to a sprawling operation and what the sheriff’s office calls the biggest marijuana bust in Bay Area history.
In all, law enforcement seized about 100,000 marijuana plants, a number that could balloon to 500,000 by the time they tally all the evidence, Sgt. Ray Kelly said. Additionally, deputies took $10 million in cash and assets, 12,000 pounds of processed product ready for distribution, and more than a dozen weapons, including handguns, rifles and shotguns.
Sheriff’s deputies arrested seven people who they believe are leaders of an organized crime ring, which may have provided low-cost cannabis to licensed dealers and dispensaries. Kelly speculated that this bust may put a dent in the local cannabis supply chain for several months.
“They’ve probably been one of the major suppliers of marijuana to ... our retail industry,” he said of the corporate-style criminal enterprise.
Some industry consultants viewed these remarks as fearmongering, however, and worried the sheriff was trying to intervene in an industry that law enforcement no longer controls.
Speaking to reporters Thursday outside the raided building in San Leandro, Kelly offered a glimpse into the business, drawing comparisons to Silicon Valley and to Prohibition-era bootlegging.
Its leaders poured millions of dollars into infrastructure, Kelly said, outfitting buildings with generators and massive air filters, along with an elaborate system of digital timers and switches for the water and lights.
They pumped in carbon dioxide, producing giant, muscular plants that Kelly said were among the highest quality his office’s detectives had ever seen.
“If you were going to grow marijuana at a ... Big Tech level, it would look like this,” he surmised.
The San Leandro warehouse on Neptune Drive was among the smaller sites in this mega-business, which included giant buildings furnished with break rooms, television screens and vending machines. Investigators found upward of 40 Rolex watches at a house in Castro Valley connected to one of the suspects, along with designer handbags and gym bags stuffed with $1 million in cash.
When deputies searched a warehouse on 77th Avenue in Oakland, they found at least one bottle of Louis XIII cognac and a refrigerator filled with thousand-dollar bottles of Napa Valley wine.
Although cannabis sales are legal, they are heavily taxed and regulated. Growers and dealers who circumvent the legal system could be withholding tax money from the public, polluting the environment and endangering public health with products that have not been vetted.
Nonetheless, they may have financial incentives to bypass the rules: Illegal cannabis can be cheaper to grow, which may have enabled this marijuana ring to quickly expand while undercutting competition.
Sean Donahoe, a cannabis regulatory consultant, argued that it would not make practical or economic sense for a legal vendor to purchase from an illicit supplier, given how closely the state tracks each plant from seed to sale — and given that it’s possible to find cheap cannabis on the legal market.
“Law enforcement is claiming, without evidence, that this unregulated (product) is being injecting into the regulated supply chain,” Donahoe said. “If they don’t explain how, that is gaslighting. That is a misrepresentation to the public at large.”
He accused the sheriff of trying to “perpetuate fear and reefer madness.”
Kelly said that the crime ring had some legal business dealings connecting it to local dispensaries, but that the legal business appeared to be a front for the underground one.
Ersie Joyner III, a retired Oakland police captain-turned-cannabis consultant and business owner, was also skeptical of the notion that legal dispensaries would purchase from a black market supplier. He noted that regulators test every product for more than 100 substances, ranging from heavy metals to toxins — including mold, which can harm consumers. Each must receive a certificate of analysis to be sold legally.
But the Bay Area still has a thriving underground market where the members of this crime ring could have sold their cannabis, Joyner said. Or they might have shipped it out of state.
Joyner said he became aware of illegal marijuana warehouses in Oakland a month ago, when a transformer exploded behind his legal dispensary on nearby Oakport Street. He believes that a facility located between Oakport and Edgewater Drive sucked up so much power that it started the fire.
“It burned down the entire telephone pole,” Joyner said. “It could have easily burned down several businesses in the area. It shorted all the internet for the block. Toyota, Chipotle, In-N-Out Burger, Panda Express — all legal businesses operating there — lost power and lost business due to this illegal cultivation.”
Kelly confirmed that one of the Oakland warehouses shut down in the bust was in that vicinity.
On Tuesday, deputies loaded 37.6 tons of marijuana into a convoy of tractor trailers, headed to an incinerator in the Central Valley. Such a huge volume of cannabis cannot be stored, Kelly said, because it would release copious amounts of toxic ammonia. And law enforcement cannot sell or give it away because they cannot vouch for its quality or determine whether it meets the state’s legal guidelines.
The indoor plant nurseries were so heavily forested with marijuana that deputies had to use chain saws and gas-powered hedge trimmers to chop down the entire crop. At the building on Neptune Drive, 41 garbage bags of marijuana lined the ground floor threshold at 11:30 a.m., along with a pallet of cubes for hydroponic growing. Before noon, deputies dragged out another six trash bags, wiping sweat from their foreheads.
Despite their nondescript facades, the sites likely had a massive environmental impact, Kelly said, dumping fertilizers and other chemicals into the drainage systems. State regulators may have to take samples, since some chemicals are known to be carcinogenic. Each building also posed a major fire threat, given the amount of power and the illegal wiring required to nurture thousands of plants.
He said the sheriff’s office has not finished its investigation, which so far has required 100 personnel, many of whom had to be plucked from other assignments. They believe the marijuana crime ring has tentacles spreading throughout the state — a giant, multiheaded hydra that would likely require more resources than the Alameda County Sheriff’s Office has at its disposal.
https://www.sfchronicle.com/crime/ar...photo-21534375
An Alameda County sheriff’s deputy revved up a trimmer and began hacking through a thicket of marijuana plants — enough to fill several rooms of a warehouse in San Leandro and, eventually, scores of garbage bags.
The facility, a stocky industrial building near the Bay Trail and the Oakland airport, was among 18 locations that sheriff’s deputies raided this week in San Leandro, Oakland, Hayward and Castro Valley. A tip 18 months ago led to a sprawling operation and what the sheriff’s office calls the biggest marijuana bust in Bay Area history.
In all, law enforcement seized about 100,000 marijuana plants, a number that could balloon to 500,000 by the time they tally all the evidence, Sgt. Ray Kelly said. Additionally, deputies took $10 million in cash and assets, 12,000 pounds of processed product ready for distribution, and more than a dozen weapons, including handguns, rifles and shotguns.
Sheriff’s deputies arrested seven people who they believe are leaders of an organized crime ring, which may have provided low-cost cannabis to licensed dealers and dispensaries. Kelly speculated that this bust may put a dent in the local cannabis supply chain for several months.
“They’ve probably been one of the major suppliers of marijuana to ... our retail industry,” he said of the corporate-style criminal enterprise.
Some industry consultants viewed these remarks as fearmongering, however, and worried the sheriff was trying to intervene in an industry that law enforcement no longer controls.
Speaking to reporters Thursday outside the raided building in San Leandro, Kelly offered a glimpse into the business, drawing comparisons to Silicon Valley and to Prohibition-era bootlegging.
Its leaders poured millions of dollars into infrastructure, Kelly said, outfitting buildings with generators and massive air filters, along with an elaborate system of digital timers and switches for the water and lights.
They pumped in carbon dioxide, producing giant, muscular plants that Kelly said were among the highest quality his office’s detectives had ever seen.
“If you were going to grow marijuana at a ... Big Tech level, it would look like this,” he surmised.
The San Leandro warehouse on Neptune Drive was among the smaller sites in this mega-business, which included giant buildings furnished with break rooms, television screens and vending machines. Investigators found upward of 40 Rolex watches at a house in Castro Valley connected to one of the suspects, along with designer handbags and gym bags stuffed with $1 million in cash.
When deputies searched a warehouse on 77th Avenue in Oakland, they found at least one bottle of Louis XIII cognac and a refrigerator filled with thousand-dollar bottles of Napa Valley wine.
Although cannabis sales are legal, they are heavily taxed and regulated. Growers and dealers who circumvent the legal system could be withholding tax money from the public, polluting the environment and endangering public health with products that have not been vetted.
Nonetheless, they may have financial incentives to bypass the rules: Illegal cannabis can be cheaper to grow, which may have enabled this marijuana ring to quickly expand while undercutting competition.
Sean Donahoe, a cannabis regulatory consultant, argued that it would not make practical or economic sense for a legal vendor to purchase from an illicit supplier, given how closely the state tracks each plant from seed to sale — and given that it’s possible to find cheap cannabis on the legal market.
“Law enforcement is claiming, without evidence, that this unregulated (product) is being injecting into the regulated supply chain,” Donahoe said. “If they don’t explain how, that is gaslighting. That is a misrepresentation to the public at large.”
He accused the sheriff of trying to “perpetuate fear and reefer madness.”
Kelly said that the crime ring had some legal business dealings connecting it to local dispensaries, but that the legal business appeared to be a front for the underground one.
Ersie Joyner III, a retired Oakland police captain-turned-cannabis consultant and business owner, was also skeptical of the notion that legal dispensaries would purchase from a black market supplier. He noted that regulators test every product for more than 100 substances, ranging from heavy metals to toxins — including mold, which can harm consumers. Each must receive a certificate of analysis to be sold legally.
But the Bay Area still has a thriving underground market where the members of this crime ring could have sold their cannabis, Joyner said. Or they might have shipped it out of state.
Joyner said he became aware of illegal marijuana warehouses in Oakland a month ago, when a transformer exploded behind his legal dispensary on nearby Oakport Street. He believes that a facility located between Oakport and Edgewater Drive sucked up so much power that it started the fire.
“It burned down the entire telephone pole,” Joyner said. “It could have easily burned down several businesses in the area. It shorted all the internet for the block. Toyota, Chipotle, In-N-Out Burger, Panda Express — all legal businesses operating there — lost power and lost business due to this illegal cultivation.”
Kelly confirmed that one of the Oakland warehouses shut down in the bust was in that vicinity.
On Tuesday, deputies loaded 37.6 tons of marijuana into a convoy of tractor trailers, headed to an incinerator in the Central Valley. Such a huge volume of cannabis cannot be stored, Kelly said, because it would release copious amounts of toxic ammonia. And law enforcement cannot sell or give it away because they cannot vouch for its quality or determine whether it meets the state’s legal guidelines.
The indoor plant nurseries were so heavily forested with marijuana that deputies had to use chain saws and gas-powered hedge trimmers to chop down the entire crop. At the building on Neptune Drive, 41 garbage bags of marijuana lined the ground floor threshold at 11:30 a.m., along with a pallet of cubes for hydroponic growing. Before noon, deputies dragged out another six trash bags, wiping sweat from their foreheads.
Despite their nondescript facades, the sites likely had a massive environmental impact, Kelly said, dumping fertilizers and other chemicals into the drainage systems. State regulators may have to take samples, since some chemicals are known to be carcinogenic. Each building also posed a major fire threat, given the amount of power and the illegal wiring required to nurture thousands of plants.
He said the sheriff’s office has not finished its investigation, which so far has required 100 personnel, many of whom had to be plucked from other assignments. They believe the marijuana crime ring has tentacles spreading throughout the state — a giant, multiheaded hydra that would likely require more resources than the Alameda County Sheriff’s Office has at its disposal.
https://www.sfchronicle.com/crime/ar...photo-21534375
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