WATCH: O’Keefe Media Group Uncovers Massive Fraud With California Smoke Shops Accepting EBT for Illegal Kratom

O’Keefe Media Group (OMG) released another exposé of the massive fraud in the EBT cash and food assistance program, showing that EBT is being used to purchase illegal drugs from shops in California. 

This comes after OMG dropped parts one and two of its “Fraud Is The New Dope” series, showing smoke shops and bodegas across New York City taking EBT cards for drug and alcohol purchases.

O’Keefe Media Group Drops Part 2 NYC Fraud: NYC Bodegas Caught Selling Alcohol Using SNAP and EBT Benefits (VIDEO)

Now, they’ve uncovered the same fraudulent practice in smoke shops in California, where kratom products are illegal to sell or manufacture.

The opioid-like herbal substances are banned in California because they “pose significant health risks to consumers” and “are associated with addiction, serious harm, overdose, and death,” according to the state.

Back in March, Governor Gavin Newsom’s office boasted in a press release about compliance with “the state’s comprehensive efforts to crack down on dangerous and illegal drugs from store shelves.” The governor’s office claimed a 95% rate of compliance from California businesses removing products from their shelves.

“California will not stand by while dangerous, illegal products are sold in our communities. We’ve shown with illegal hemp products that when the state sets clear expectations and partners with businesses, compliance follows. This effort builds on that model — education first, enforcement where necessary — to protect Californians,” Newsom said in a statement.

But it’s now been revealed that businesses are not complying. Instead, they’re selling it under the table.

Worse, as seen in the undercover footage, store clerks are accepting EBT cash and EBT food cards for the illegal sales. EBT food (SNAP) cards can only be used to purchase eligible food items, but store clerks are seen attempting to run the cards as grocery purchases.

Clerks are also seen accepting EBT cash cards, which can be used for more general eligible living expenses. At a smoke shop in San Diego, OMG citizen journalists were asked to pull cash out using their EBT at the ATM, exposing a loophole for stores that cannot accept EBT.

James O’Keefe wrote on X:

EXPOSED: O’Keefe Uncovers California Smoke Shops Selling Banned Kratom, With Clerks Attempting to Process Purchases Using Government-Funded EBT Benefits as “Groceries” or EBT Cash

The clerk in San Diego stated, “They banned it for good. So tomorrow is the last day. You have to remove every single piece [of kratom]. If they got you with this [kratom], it’s a felony. That’s a big-time felony.”

At a Los Angeles store, an undercover journalist asked, “You ran it as groceries right?” The clerk nodded yes, confirming the attempted purchase was categorized as an EBT grocery transaction.

At another LA smoke shop, a clerk asked, “Can $7 be EBT cash?” before another clerk responded, “Yeah, I think so. EBT cash.”

WATCH:

EXPOSED: O’Keefe Uncovers California Smoke Shops Selling Banned Kratom, With Clerks Attempting to Process Purchases Using Government-Funded EBT Benefits as “Groceries” or EBT Cash

The clerk in San Diego stated, “They banned it for good. So tomorrow is the last day. You have to… pic.twitter.com/6QWEEgQuuJ

— James O’Keefe (@JamesOKeefeIII) September 18, 2026