Weedmaps will stop advertising unlicensed cannabis retailers ‘later this year’

Online advertising giant Weedmaps said Wednesday it will begin requiring a state license number for all marijuana retail listings on its site, indicating it will cease carrying ads for unlicensed cannabis shops and delivery services.

The move could prove an enormous boon to legal retailers that have been struggling to compete with illegal shops simply by eliminating the black-market advertising presence on Weedmaps, which remains one of the most commonly used dispensary finders by marijuana consumers.

A spokesperson for the Irvine, California-based company did not immediately respond to a request for further comment, so it’s unclear exactly when the new requirement may go into effect.

According to a news release, Weedmaps will also be “restricting the use of its point of sale, online orders, delivery logistics and wholesale exchange software-as-a-service (SaaS) platforms to licensed operators exclusively.

“In addition, Weedmaps will explore ways to make it easier for patients and adult-use consumers to identify the license number on advertised listings.”

Insiders in California’s cannabis industry said Weedmaps was “capitulating” to pressure from both state regulators and others in the industry to quit carrying ads for hundreds of unlicensed companies that don’t comply with state regulations and don’t pay taxes, which critics of Weedmaps argue has undermined California’s legal market since it launched in January 2018.

Weedmaps CEO Chris Beals said in the release, however, that the move is a reflection of the company’s “commitment to working with lawmakers and regulators to foster a flourishing legal market.”

The California Bureau of Cannabis Control (BCC) sent Weedmaps a cease-and-desist letter in February 2018 regarding its ads for unlicensed retailers, but the company last March refused to comply, contending it was protected by federal law.

That means Weedmaps has been advertising for nearly 2,000 illicit competitors of California’s legal market for over a year and a half.

Sacramento-based cannabis industry consultant Jackie McGowan estimated that, as of Aug. 1, Weedmaps was still carrying ads for roughly 400 unlicensed marijuana storefronts and 1,400 unlicensed MJ delivery services in California.

Weedmaps conceding to state

“That’s how I read it – they’re capitulating,” Khurshid Khoja, a longtime California cannabis attorney, said of Weedmaps’ statement.

Weedmaps’ ads have served as a flashpoint since the legal market launched and have led many in the legal market to push for any action they can get to force the site to stop advertising for unlicensed shops.

Longtime critics hailed Wednesday’s news as a win.

“It’s good to hear. That’s all we’ve ever wanted,” said Jerred Kiloh, the president of the Los Angeles-based United Cannabis Business Association.

Kiloh has been one of the most vocal critics of Weedmaps and has been sponsoring a bill in the state Legislature that would help force Weedmaps to stop advertising for unlicensed retailers if it becomes law.

But he and others in the industry believe another new law – Assembly Bill 97 – has already given the BCC the tools it needs to force Weedmaps to comply because the statute includes a possible $30,000-a-day fine for violations that could apply to companies that don’t hold state MJ business licenses.

If regulators chose to do so, they could have possibly levied a fine in the tens of millions of dollars against Weedmaps for its carrying ads from illegal MJ sellers, sources told Marijuana Business Daily.

“I know the BCC has been putting pressure on them to comply or else, so this is the ‘or else’ part,” Kiloh said.

BCC chief Lori Ajax wrote in an emailed statement to MJBizDaily on Wednesday night that Weedmaps’ “announcement is a step forward for the legal California cannabis industry, which will aid consumers in identifying licensed cannabis businesses when looking to purchase safe cannabis.

“The Bureau is continuing enforcement activities against businesses not complying with cannabis advertising laws.”

 ‘Even playing field’ may result

McGowan wrote in an email to MJBizDaily that she “applauds” the move by Weedmaps.

“Over the past two years, Weedmaps has continued to undermine the licensed industry by advertising illicit operators just as the newly legal market has attempted to expand,” McGowan wrote.

“According to a report that came out just last week, the illicit market remains almost three times the size of the legal market. Legal businesses deserve an even playing field, and that’s not possible when a technology platform plays both sides.”

Kiloh also estimated that Weedmaps’ support for illicit retailers may have cost the legal industry upwards of $800 million in sales since January 2018 in the city of Los Angeles alone and cost the state of California $200 million in marijuana tax revenue.

A good bit of that revenue may shift into legal channels once Weedmaps stops directing consumers to unlicensed shops, Kiloh said, since the site is one of the most well-known marijuana-shop finders on the internet.

Nicole Elliott, senior adviser on cannabis in California Gov. Gavin Newsom’s Office of Business and Economic Development, expressed measured support for the move but implied Weedmaps will need to live up to expectations.

“From Day One we’ve made it clear we want to support the legal market,” Elliott wrote in an email to MJBizDaily. “This includes ensuring everyone is abiding by the law. Advertisers are no exception.

“While this is a signal that Weedmaps seems to be taking our priority of compliance to heart, like anything, the devil is in the details.”

John Schroyer can be reached at [email protected]

20 comments on “Weedmaps will stop advertising unlicensed cannabis retailers ‘later this year’
  1. William Fowler on

    I am surprised it took this long for Weedmaps to comply, since in affect they were participating in the illegal market by advertising for illegal store fronts. Its is also surprising that law enforcement did nothing to Weedmaps to force them to comply. It would seem that all the enforcement efforts in Los Angeles and other cities around the state would simply go into a cannabis shop or dispensary and request a copy of state license, if they didn’t have one…..Shut them down!!! Why is it that there has been huge raids on grows, yet on the retail side, no enforcement action. Does this mean that law enforcement has been on the “take” for years????

    Reply
    • Kyle Balls on

      I bet weedmaps waiting till them and Damian Martin snagged up a ton of licenses. 90 percent of retail licenses in California are owned by 10 companys. So corrupt. Just a way for medmen to make more money. Sad and disturbing. The state makes this like they are heroes. What about the people that have to drive over a four now to get medicine because most cirts dont allow it. This is going backwards not forward.

      Reply
  2. Dan Thompson on

    Weedmaps has been taking unlicensed dispensaries since they were founded.

    How can any business ever trust them as they continue to drag their feet removing them?

    There are many other alternatives to Weedmaps, companies with integrity and much better security.

    Reply
  3. Seth Tyrssen on

    Have any of you guys figured out that there’s a REASON the “black market” even exists??? If I have to explain, you wouldn’t understand.

    Reply
  4. Ricki o on

    I have serious health issues and I am elderly. I trusted Weedmaps to give me the name of a medical dispensary in San Diego. The one recommended by Weedmaps was filthy, unlicensed and I was fearful of the unsupervised clientele. Needless to say I left The premises immediately. Never use their services again.

    Reply
  5. David Rodriguez on

    When did MJBiz become a tool of racist propaganda? Taking and announcement about a company setting up a program to helps blacks and latinos succeed in the industry and making it about the political agenda of the rich white people it then quotes in the article is despicable. You’d think your audience is interested in how to get the free benefits!!

    Reply
  6. Rex Stock on

    Weak. Weedmaps ‘details and devils’ trope is a whole lotta crap. They’ve had lots of time to come up with a better answer than that. Weak.

    Reply
  7. Charlie on

    WHY DON’T THE AUTHORITIES USE WEEDMAPS TO FIND AND PROSECUTE THOSE UNLICENSED OPERATORS?

    THAT SHOULD BE ANOTHER COMMON SENSE SOLUTION TO THIS PROBLEM.

    Reply
  8. Melissa on

    Weed Maps knows that some of us have no choice ! $64 has left us in a Cannabis Desert thanks to all the cities 70% Of Ca. Cities Ban Legal Cannabis sales / deliveries.
    Where did all of us start any ways… Remember your Roots?and remember that some of us Stuck till Legal gets to us . Some of us want to come outta the darkness.
    Ca. needs to take a good hard look at the way the legal licenses are handeled For Real ! Big Pot is getting all the Licences, let the ones who have been in the market into the legal market, Why You Gotta Make It So Hard $$$
    But we still have to take care of our patients the ones who are suffering everyday , we cannot and will not abandon The chronic pain suffers the Veterans, the chronically ill that depend on our cannabis medicine. Black Market is full of caring people, that are supplying quality cannabis medicine !
    I am writing this to even the playing field since only bad things seem always to be said . Cannabis legalization should be state wide, not just for the 30%.
    Thank you???

    Reply
  9. Tony Cerilli on

    This story seems bought and paid for by MSOs that want to put small-business owners out of business. Are there bad actors who lack a license? Sure! But the majority of unlicensed operators in CA are honest people who simply can’t get a license. Why doesn’t this story mention that LA County only offers about 200 licenses, while in OK there are more than 1,000? It’s crazy. We need more licenses to be made available in California, period.

    Reply
  10. Tom on

    Weedmaps dragged their feet on this issue. As a former state regulator in the cannabis industry, we continually requested they not advertise unlicensed illegal marijuana black market distribution networks. They never complied.

    Reply
  11. Feliciaoakland on

    I am WOC and microbusiness licensed in Oakland. I used to pay weed maps over $500.00 a month and had to compete with unlicensed providers. I had to pull my ad from WM because I couldn’t give away as much free stuff or charge much lower prices because it cost me so much $ to obtain and maintain my license. I am barely hanging on because I am taxed and regulated by government to death! The taxes I am required to pay forces me to charge more $ for products that unlicensed don’t have to worry about. I’m not mad at the BM, I was there too before however I as a Woc biz I will not make it if I have to compete with 80% Oaklands BM . I have tried to partner up and share my license but those folks with $ and power are supporting bigger business and I feel shut out for being WOC. Even though I have been in business for 9 years and have a popular Topical Cannabis product line??

    Reply
  12. Al on

    Unfortunately Felicia it’s on purpose. they dont want anybody of color or small operators to survive in this industry. The elephant in the room no one talks about is that a lot of license holders are still operating unlicensed businesses on the side. Stiiizy, West Coast Cure, Bare, etc all have licenses and still sell their products to unlicensed businesses on the side.

    Reply
  13. Shona Gochenaur on

    Once we have a fair and even and not a pay to play, set elites own the political climate , we can talk about regulations, as if these folks play by the rules, it’s not that most don’t want permits, but I still, even with the candy coated equity bull, don’t see equity unfolding, and equal or I would say more important, they in the ruling caste of CA, after destroying access to compassion program, and making a tourist market, have truly made policy reform, when poor people disabled and people of color get shut out, not drug policy reform, simply a Sherman act anti trust issues, monolpy laws,
    And thug ism I bet Weedmaps did get *pressure* and I bet they are going to get their permit , interesting, meet the new boss same as the old

    Reply

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