Weedmaps has reportedly removed about 2,700 illegally operating cannabis dispensaries from its site since the start of the year, according to a Southern California News Group report. The company announced in August that it would no longer accept listings from unlicensed businesses after California regulators sent the firm a cease-and-desist to stop advertising illegal operators.
Beginning January 1, companies that wanted to be listed on the platform must provide a state license number or sign an agreement promising they only sell CBD products; however, some analysts suggest that system is wrought with loopholes that allow illegal operators to add “CBD” to their names and skirt the licensing requirements.
Jackie McGowan, a cannabis consultant who’s tracked Weedmaps’ listings for two years, said that some businesses are even “entering legal cannabis license numbers that they are poaching from real licensees.”
“While we believe that Weedmaps has indeed owned up to their agreement to stop listing unlicensed businesses, we also believe there are several loopholes that are still being exploited by rogue shops.” – McGowan, to the News Group
According to McGowan’s research, the number of retail cannabis ads posted on Weedmaps decreased from 5,610 on December 31 to 2,920 on January 3 – a reduction of 2,690 illicit shops, or about 48 percent of Weedmaps’ retail ads. However, the number of ads for illicit shops are more than double those for legal ones.
Weedmaps isn’t the only site listing illegal shops; BudTrader.com has hundreds of ads for unlicensed dispensaries, according to the report.
A law passed last year allows California regulators to impose a $30,000-per-day fine for each violation by a company advertising illegal cannabis companies.
Editor’s note (1/13/20): A Weedmaps representative has disputed the reported number of listings that have been removed since January 1 but would not provide a different sum as the company considers its client data to be proprietary.
According to the statement received by Ganjapreneur, the unlisting of unlicensed businesses was also not prompted by the regulators’ cease-and-desist letter.
“Since its inception, Weedmaps has served hundreds of dispensaries that have been providing patients with safe access to cannabis under Proposition 215, the Compassionate Use Act of 1996. Like most in the cannabis industry, we expected that the cities and state of California would provide a pathway for these businesses to operate compliantly after the legalization of adult-use cannabis in 2016. When cannabis businesses’ temporary exemptions expired earlier in 2019 with no path to licensing, we started mobilizing to comply with the regulations to restrict our platform to the lucky few who had been able to get a license. At Weedmaps, it’s our mission to power a transparent and inclusive global cannabis economy. Compliance is central to this mission, so it was necessary to implement this policy, but we are working hard to try to impact regulations and policies to expand license access and the state of the market.” — Travis Rexroad, Weedmaps’ Director of Public Relations, in an email
Get daily cannabis business news updates. Subscribe