Widespread corruption has been a significant issue in the US legal cannabis industry, primarily stemming from the lucrative and limited nature of business licenses at the state and local levels

. This environment has led to numerous bribery scandals, pay-to-play schemes, and high-profile arrests of public officials across the country, particularly in California. 

Key Drivers of Corruption

• Limited Licenses: Many states and cities place strict caps on the number of available cannabis business licenses, making them extremely valuable (potentially worth millions of dollars) and generating fierce competition.
• Local Control: State laws often defer regulatory power to local municipalities, giving a small number of local officials significant power to decide who receives a license, creating opportunities for corruption.
• Federal Illegality & Cash-Intensive Businesses:Since cannabis is federally illegal, businesses struggle to access traditional banking services and are forced to deal mainly in cash, which is a breeding ground for illicit transactions and money laundering.
• Lack of Regulatory Precedent: Unlike industries like alcohol or gambling with decades of established regulations, policymakers are “making it up as we go” with cannabis, leading to inconsistent safeguards and norms. 

Prominent Examples and Cases

Corruption cases have been reported in various states: 

• California: This state has been a hotbed of corruption, with multiple local officials in cities like Baldwin Park, Commerce, Calexico, and Adelanto convicted or charged in bribery schemes. The schemes often involved demands for cash bribes, political donations, or consulting fees in exchange for favorable licensing outcomes. A company even won a $1.9 million verdict against Baldwin Park over a fraudulent license. State officials have since launched an audit to curtail these issues.
• Massachusetts: The former mayor of Fall River, Jasiel Correia, was involved in a scheme where business owners paid $600,000 in bribes for license support. A state audit in 2025 also highlighted a lack of organization in the state’s Cannabis Control Commission, which could invite favoritism.
• Maryland: A former state delegate, Cheryl Glenn, was sentenced to prison for accepting bribes to introduce and vote on legislation beneficial to medical marijuana companies.
• Missouri: The rollout of the state’s medical marijuana program has been the target of legislative and law enforcement probes due to allegations of bias in the license application scoring process.
• Michigan: Several individuals have pleaded guilty to federal charges related to bribery schemes to obtain cannabis licenses in Garden City. 

Federal authorities, including the FBI, have warned states about the public corruption threat posed by the expanding cannabis industry and have actively pursued investigations across the country. 

Widespread 

cannabis corruption has been a significant issue across the United States, primarily at the local and state government levels, stemming largely from the process of awarding a limited number of lucrative business licenses. Federal authorities, including the FBI and Department of Justice, have actively investigated and prosecuted numerous officials and business operators involved in bribery and “pay-to-play” schemes. 

Key Areas and Examples of Corruption

Corruption allegations and convictions have been particularly prevalent in states that limit the number of available licenses, which makes the permits extremely valuable and susceptible to illicit dealings. 

• California: The state has experienced the most high-profile and widespread scandals. Federal investigations have uncovered extensive bribery networks in cities like Baldwin Park, Commerce, Calexico, and Adelanto. City officials accepted bribes, sometimes in “brown paper bags” with cash amounts up to $250,000, in exchange for promising or fast-tracking cannabis permits. Several former officials, including city council members and city attorneys, have been convicted and sentenced to prison.
• Massachusetts: The former mayor of Fall River, Jasiel Correia, was involved in a scheme where business owners allegedly paid him $600,000 in bribes for favorable action on their license applications.
• Maryland: A former state delegate, Cheryl Glenn, was sentenced to two years in prison for taking bribes to introduce and vote on legislation that would benefit medical marijuana companies.
• Michigan and Arkansas: Cases of bribery and pay-to-play schemes in the licensing process have also surfaced in these states, leading to federal charges and convictions.
• Missouri: The rollout of the state’s medical marijuana program faced law enforcement and legislative probes due to concerns about the fairness of the licensing process, with many claiming licenses went to the well-connected. 

Contributing Factors and Broader Issues

• Limited Licenses: Arbitrary caps on the number of licenses create “choke points” in the market, driving up the value of permits and fostering a “winners and losers” system that invites corruption.
• Local Control: Granting extensive discretion to local officials in the permitting process has created opportunities for bribery and conflicts of interest.
• Federal Illegality: Because cannabis remains illegal at the federal level, businesses often deal primarily in cash, making it harder to track transactions and easier for illicit payments to occur outside of normal financial scrutiny.
• Lack of Regulatory Norms: The cannabis industry is relatively new, and regulators often lack established safeguards present in older industries like alcohol or gambling, making them more vulnerable to abuse.
• Organized Crime and Fraud: Officials have warned that the unregulated nature of some markets can attract international criminal organizations and investment fraud schemes. 

State and federal authorities are attempting to address these issues through audits, investigations, and calls for more transparent and standardized licensing procedures. 

The term “hemp corruption” in America generally refers to two primary issues within the legal cannabis and hemp industries:

• Public corruption in licensing: Bribery and “pay-to-play” schemes involving local and state officials in exchange for licenses to operate cannabis (including marijuana and hemp) businesses.
• Regulatory uncertainty and controversy: The ongoing legislative debate over the legal definition of hemp and its intoxicating derivatives, which industry advocates argue could lead to an effective ban and create an illicit market, similar to historical Prohibition-era corruption and organized crime. 

Corruption in Licensing

Since the legalization of recreational and medical cannabis in various states, there have been numerous cases of public corruption. 

• Bribery and Extortion: Officials in cities like Adelanto, California, Fall River, Massachusetts, and Calexico, California, have been indicted or pleaded guilty to soliciting and accepting bribes from individuals seeking licenses to operate marijuana businesses.
• Pay-to-Play Schemes: Investigations by the FBI and news outlets, such as the Los Angeles Times, have uncovered widespread “pay-to-play” scenarios where license applicants alleged officials conspired to award limited licenses to predetermined companies or demanded cash payments for support. The FBI issued a public warning in 2019 about the acute corruption threat in the expanding cannabis industry.
• State-Level Issues: The corruption has reached state levels, with a former Maryland state delegate sentenced to prison for taking bribes for legislation benefiting medical marijuana companies. 

Regulatory Debate and Potential “Corruption”

The “corruption” in this context refers more to alleged undue influence by powerful lobbying groups (e.g., alcohol industry, legal marijuana industry) on federal legislation that could eliminate the legitimate hemp-derived products market. 

• Legislative Changes: A recent provision in a federal spending bill, signed in November 2025, effectively bans most intoxicating hemp products by drastically tightening THC limits per container. This move, which doesn’t take effect for a year, has been criticized by hemp advocates who claim it was quietly slipped into the bill without public input and influenced by large donations from competing industries.
• Uncertainty and Fraud: The ambiguity of the 2018 Farm Bill, which legalized hemp, created a “massive gray market” that bad actors have exploited, leading to concerns about unregulated products and an increase in child poisonings. This has prompted 39 state attorneys general to urge Congress for clearer regulation.
• Voter Deception: In Massachusetts, there have been allegations of fraudulent tactics used to gather signatures for a ballot initiative that would end legal cannabis sales in the state, further muddying the political landscape. 

The industry faces a mix of actual criminal corruption cases related to local licensing, and political controversy over federal regulations that could destabilize a significant, legal industry. 

The term “hemp corruption” in America generally refers to two main areas: 

bribery and “pay-to-play” scandals within the broader legal cannabis industry and recent political controversies and legislative maneuvers surrounding the regulation or potential ban of intoxicating, hemp-derived THC products. 

Political and Legislative Controversy

The primary contemporary issue involves efforts by some lawmakers to redefine or ban intoxicating hemp products, which critics allege is influenced by lobbying from competing industries, such as alcohol and the state-regulated marijuana market. 

• Potential Federal Ban: A provision was recently included in a federal funding package that would effectively ban all intoxicating hemp products by drastically lowering the allowable THC limit per package, a move industry advocates warn would decimate the nearly $28.4 billion industry and jeopardize over 300,000 jobs.
• Lobbying Influence: Reports suggest that the alcohol lobby, which views hemp-derived beverages as competition, has donated significantly to politicians like Mitch McConnell, who then quietly inserted the hemp-ban language into legislation.
• Regulatory Loophole: The current situation stems from an “ambiguity” in the 2018 Farm Bill, which legalized hemp with a dry-weight Delta-9 THC limit of 0.3% but didn’t foresee the rise of chemically derived cannabinoids (like Delta-8 and Delta-10 THC). This has created a vast “gray market” that operates outside the more stringent regulations of the state-legal marijuana industry.
• Calls for Regulation vs. Prohibition: A coalition of 39 state attorneys general has called for Congress to clarify the definition of hemp to address safety concerns, especially regarding synthetic products. The hemp industry, however, argues that thoughtful regulation (age limits, testing, labeling) is preferable to a blanket ban, which would only push the market back into the shadows and fuel illicit activity. 

Cannabis Licensing Scandals

In the broader (non-hemp specific) legal cannabis industry, corruption has frequently appeared in the form of “pay-to-play” schemes related to obtaining valuable business licenses. 

• Bribery and Extortion: Numerous cases have been documented across the U.S., particularly in states with limited license availability, where public officials have solicited or accepted bribes in exchange for licenses or support for applications. Examples include:
  • California: Widespread investigations have uncovered schemes involving cash payments in brown paper bags and the extortion of cannabis companies by local officials.
  • Massachusetts & Maryland: Mayors and state delegates have been indicted and sentenced for taking bribes related to marijuana licensing and legislation.
• Voter Fraud Allegations: There have been claims of fraudulent signature-gathering campaigns aimed at putting initiatives on the ballot that would repeal existing legal cannabis markets, further muddying the political landscape. 

The FBI has issued public warnings about the heightened risk of public corruption in the expanding cannabis industry due to the high value of licenses and the local control over their issuance.