As US and China exchange threats of tariffs on each other's goods, another kind of trade tensions are running high.
How Chinese money turned 100 California houses into weed factories
US agents have seized more than 100 houses in Sacremento, California suspected to be marijuana growing sites run by organized Chinese drug traffickers.
Hundreds of law enforcement officers raided the homes this week and took possession of them.
The raids were one of the largest residential drug busts in US history, and part of a yearslong crackdown on marijuana operations run by Chinese nationals, the authorities said.
“When criminal organizations funded by money from China reach into our cities to profit from illegal activity, our communities suffer,” US Attorney McGregor Scott said in a statement.
The properties will be auctioned off later, with the proceeds going to government coffers. They will likely be to the tune of hundreds of millions of dollars.
Hundreds of officers raided 81 houses on Tuesday and Wednesday, while another 25 homes were searched in previous weeks, the Associated Press reported.
Altogether authorities seized more than 61,000 pot plants, 440 pounds of processed marijuana, at least $100,000 in cash and 15 firearms.
The 440 pounds of weed is enough to fill about 400,000 joints.
Marijuana use is legal in California, but growers must be licensed and must not ship to other states.
A number of Chinese nationals have been arrested in the past for running illegal pot grow houses.
Their business often originate in China, law enforcement offiicals said, following a four-step formula that ends with shipment all over the US. Here’s how it's usually done (Inkstone does not condone or support this behavior):
Step 1 – Buy a house
Down payments for the houses are financed by money wired mainly from Fujian province on China’s southeastern coast.
The province is known as one of the primary origins of Chinese immigrants to the US over the past two centuries.
The payments have to be wired in several batches, since Chinese government caps the overseas transfers to $50,000 per day per person.
Step 2 – Renovate it
The houses are then equipped with high-intensity lights and irrigation pipes.
They are also gutted to add ventilation pipes and air filtration systems, which vent the smell of the growing operation.
The facilities can boost electricity consumption by 3,000% to 4,000%, leading to high utility bills that alerted authorities, according to court documents cited by The Sacramento Bee.
Some houses are also equipped with diesel generators that run 24 hours a day.
Step 3 – Grow, grow, grow
One single house can contain hundreds or thousands of marijuana plants.
Federal officials suggest that the Chinese-speaking growers may essentially be “indentured servants,” forced to work because they were in debt to the gangs. So far, none have been arrested.
Most of them are in the country legally.
Thomas Yu, an Asian gang investigator with the Los Angeles County Sheriff’s Department, told The Sacramento Bee last year that many growers were experienced farmers from poor Chinese provinces, often in their 50s and 60s.
Step 4 – Sell it
Yu said a single pot house typically produced three crops annually, which could be sold for a total of $1 million or more.
Much of the drug was shipped to the east coast through Atlanta, Chicago and New York City.
Federal officials said the latest raids targeted “a sophisticated large-scale organized criminal network” backed by Chinese money from overseas.
But John Renwick, a Sacramento lawyer who has represented over 100 ethnic Chinese pot growers in the past decade, told Inkstone that many of the clients started the business on their own.
Some are American citizens or green card holders, although increasingly they are new arrivials, Renwick said.
“It would be a mistake to assume it is all organized crime,” the lawyer said.
“A lot of people learned from others that growing marijuana was very profitable. It requires a tremendous amount of energy, but Chinese people are willing to go out of their way to make money.”
The Sacramento government said in October last year that the state capital had between 800 to 1,000 pot grow homes.