Federal prosecutors have subpoenaed records from Ghost Management Group LLC – owners of Weedmaps – seeking documents related to listed businesses, its ordering service, its staff, and its investors and accounting, according to a MarketWatch report.
In a statement to MarketWatch, a Weedmaps representative said the company would not comment “about any specific legal matters or inquiries with respect to the company or any of its customers.”
“Given our role as the largest technology company in the cannabis sector, from time to time, Weedmaps receives requests for information from government agencies. We cooperate with these requests as we do with all lawful inquiries.” – Weedmaps in a statement to Marketwatch
According to the documents outlined by Marketwatch, prosecutors are seeking documents related to Terra Tech Corp, which rebranded as Onyx Group Holdings following a recent merger, and CannnaCraft one of California’s largest cannabis distributors.
Matt Kumin, a civil-rights lawyer, indicated that federal prosecutors employed a similar tactic in Colorado shortly after legalization aimed at “companies that appeared to be violating state regulations in fundamental ways.” In order for any case to proceed, prosecutors would have to prove the companies were violating state regulations.
Medical cannabis programs and medical cannabis businesses in compliance with their state rules are protected from federal law enforcement under provisions included in the federal budget; however, those protections do not include recreational programs and businesses.
According to the report, the prosecutors are also seeking communications with and any payments to local, state, and federal employees, as well as elected officials and any candidates for those offices.
Weedmaps has come under fire by state regulators in California for allowing unlicensed operators to list on their platform but the company indicated last summer that they would no longer allow businesses to list or advertise on the platform without a state identification number. The subpoena includes a demand for records related to Weedmaps’ policy change.
The case is filed in the Eastern District of California and representatives for the court, TerraTech, and CannaCraft have not commented.
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