Corruption and Crackdowns in California's Marijuana Market

Black markets thrive under mismanaged legalization.

- By Scott Shackford

After California voters decided to legalize the cultivation and sale of recreational marijuana in 2016, the vast majority of the state’s cities banned those activities within their borders. But Adelanto’s leaders were eager to embrace the newly legal market. The small desert town of 31,000, best known for its nearby prisons, had a reputation for poverty and emptiness. Local politicians hoped legal marijuana would change that.

In May 2017, the Adelanto City Council approved a plan to license recreational growers and retailers, making the town one of the first in the state to do so. That early, atypical choice attracted a lot of national press coverage. In an interview with The New York Times, then-Mayor Richard Kerr predicted that Adelanto could raise $10 million annually by taxing local marijuana businesses.

It didn’t happen. Adelanto’s budget for 2020–21 anticipated just $1.4 million in marijuana revenue, less than a third of the city’s projected $4.5 million budget deficit. While that $1.4 million is money the town would not have seen without legalization, it clearly isn’t enough to save Adelanto.

Kerr is no longer Adelanto’s mayor. The FBI raided his home in 2018 as part of a corruption investigation. Three years later it arrested him on seven counts of wire fraud and two counts of bribery. Kerr is accused of taking at least $57,000 in bribes and kickbacks to approve permits for marijuana businesses. His arrest came four years after then–City Council Member Jermaine Wright was accused of taking a $10,000 bribe from an undercover FBI agent posing as an applicant seeking approval for a local marijuana transportation business.