WASHINGTON – International crime syndicates have “taken control of” the legal cannabis industry, according to a Drug Enforcement Administration report released in May. By exploiting weak regulatory structures, criminal gangs are saturating markets in both the United States and Europe with illicit goods as authorities struggle to stop them, the report asserts.
“[D]uring the last two decades, the black market for marijuana has expanded significantly as Chinese and other Asian TCOs [transnational criminal organizations] have taken control of the marijuana trade,” according to the 2025 National Drug Threat Assessment.
“These organized crime groups, as well as Mexican cartels, are profiting from both illegal cultivation and sales, and from exploiting the ‘legal’ market… The Chinese TCOs have an extensive transportation and distribution network that extends nationwide and overseas.”
The report notes organized criminal enterprises based in China hide in plain sight by operating grows in state-legal markets, “though most do not follow the established licensure process or have obtained their licenses through falsified means.” Those operations then serve as “the main suppliers of illicit marijuana markets and the rest of the United States, growing in excess of quotas and legal market needs.”
The report singles out Oklahoma as a hotspot for illicit product seizures, noting 66 percent of DEA seizures in 2024 took place in the state.
The harsh analysis comes at an inopportune moment for the industry, which has anticipated federal rescheduling for more than two years. The final decision may rest with Terry Cole, a twenty-year veteran of DEA field operations, critic of legalization, and President Donald Trump’s pick to serve as DEA administrator. Cole, who awaits Senate confirmation, repeatedly has declined to provide insight about his stance on rescheduling or commit to a timetable for hearings to recommence after they were paused indefinitely in January.
What does the DEA allege about legal cannabis markets?
According to the DEA’s 2025 National Drug Threat Assessment, international crime syndicates — particularly from China and Mexico — are exploiting legal cannabis frameworks in the U.S. to operate illicit grow operations and traffic illegal marijuana both domestically and internationally.
How are Chinese crime syndicates involved in U.S. cannabis?
The DEA claims Chinese transnational criminal organizations have established extensive illegal grow operations in state-legal markets, often using falsified documents to obtain licenses. These grows allegedly supply black-market cannabis across the U.S. and into Europe.
Why is Oklahoma a focus in the DEA’s cannabis investigation?
The DEA report highlights Oklahoma as a hotspot for illicit cannabis activity, with 66 percent of all DEA marijuana seizures in 2024 occurring in the state. Loopholes in regulatory enforcement have made the state attractive to organized crime.
Could this report impact federal cannabis rescheduling?
Possibly. The DEA’s claims come as the cannabis industry awaits a final decision on rescheduling. The appointment of Terry Cole, a longtime legalization critic, as DEA administrator may further complicate the timeline or direction of reform efforts.
A new DEA report accuses Chinese and Mexican crime syndicates of exploiting legal cannabis markets to distribute illicit products nationwide and in Europe. Read More
