California Law Enforcement and Tax Agencies Sell Seized Property from Cannabis Raids
In a bid to recover unpaid taxes from cannabis businesses, California Highway Patrol (CHP) and the California Department of Taxes and Fee Administration (CDTFA) organized an auction in Los Angeles on Friday, February 16. The event featured an array of items seized from both legal and illegal cannabis establishments, including glass bongs, money counters, a La-Z-Boy recliner, and even a snow cone machine.
The CDTFA disclosed that the auction was prompted by the seizure of assets from ten cannabis businesses in the Los Angeles region, nine of which were operating illegally under state regulations. The remaining one was a legally sanctioned dispensary that had failed to meet its tax obligations. The total outstanding tax debt from these businesses amounted to over $14.4 million.
CDTFA Director Nick Maduros emphasized the importance of such auctions in recovering taxes owed to the state, stating, “Seizing and auctioning property from cannabis businesses that evade the law is a tool to recover the taxes owed to the state.”
Detailed lists of the seized items up for auction were made publicly available online through the CDTFA website and via notices issued by the CHP. The assortment of items ranged from glass bongs and speakers to refrigerators, cameras, televisions, and various other miscellaneous goods.
Proceeds generated from the auction will be directed towards settling the unpaid tax liabilities of the ten implicated businesses. This marked the first instance of California government entities auctioning off seized assets from cannabis businesses, representing a novel approach in tax recovery efforts.
Although this was the first time the CHP has been involved in selling such items, previous auctions have seen commercial properties seized from delinquent cannabis businesses auctioned off. Notably, in March 2022, a property in Whittier associated with an illicit cannabis operation was auctioned to recover outstanding taxes amounting to over $850,000.
Director Maduros highlighted the detrimental effects of unlicensed cannabis operations on legitimate businesses and the community’s revenue streams, emphasizing the importance of compliance with state regulations.
California’s crackdown on illegal cannabis businesses has intensified in recent years with the establishment of the Unified Cannabis Enforcement Taskforce (UCETF) in late 2022. Led by Governor Gavin Newsom, UCETF has conducted numerous raids, resulting in the seizure of over $317 million worth of unlicensed cannabis and the dismantling of illicit operations statewide.
UCETF’s efforts have also led to the confiscation of firearms, eradication of illegal cannabis plants, and seizure of significant quantities of dried cannabis bud. Director Nicole Elliott of the Department of Cannabis Control underscored the collaborative nature of UCETF’s operations and the state’s commitment to curbing illegal cannabis activities.
The auction organized by CDTFA and CHP took place at the CHP parking lot in Los Angeles, with contact information provided for further inquiries. However, it remains unclear whether similar auctions involving seized cannabis-related items will be conducted in the future.
