Weedmaps Removes Thousands of Unlicensed Cannabis Ads

In August, Weedmaps promised to eliminate California unlicensed cannabis retailer ads from its site. The announced deadline for this action was January 1, 2020. They seem to have met that goal though there is still some question as to whether they have done enough to keep these postings from appearing on their site. 

In a statement sent to Marijuana Business Daily, Weedmaps stated that “hundreds of our retail and brand partners” had provided state license numbers, but they did not offer details on how many ads were removed or how many California businesses are currently advertising on the site. “This was the right decision,” a Weedmaps spokesperson wrote to MJBizDaily. “However, the severe shortage of licenses in the state of California at the local level is real and will be detrimental to this industry at large.”

The numbers

According to a Sacramento-based consultant, Jackie McGowan, that spoke with Marijuana Business Daily, Weedmaps seems to have scrubbed its site of approximately 2,700 illicit marijuana shops and delivery services in California. She explained that on Dec. 31, there were 5,610 listings on Weedmaps in California for various marijuana retailers. By Jan. 3, that number had changed to 2,920.

California has 1,181 legal retailers, including licensed shops, delivery services and microbusinesses, although not all of the latter engage in retail. This indicates that Weedmaps could still be showing ads for up to 1,700 unlicensed marijuana retailers. McGowan suspects many of them are illicit dealers, but how many remains unclear. “They are semi-living up to their self-imposed mandate to remove these listings,” she said. “They are failing to conduct due diligence on the authenticity of license numbers unlicensed businesses are supplying to their site.”

An industry insider familiar with Weedmaps’ operations said “expecting listing numbers to match licensee numbers shows a fundamental misunderstanding of state regulations and Weedmaps.” “The same licensee often has multiple listings,” the source said, explaining that at least one company has “several hundred” listings and that doctors, CBD stores and other businesses are included in the count.

A problem

One way that illicit shops have found to keep their contact info on Weedmaps for customers to use is to publish state license numbers poached from legal companies and pass them off as their own. Another way that some shops have found, McGowan said, is to change the store name and to include keywords such as “hemp” or “CBD” to change the retailer’s profile.

Weedmaps states that it’s been addressing ads that mislead consumers but urges legal shops to contact the company if they find their license numbers are misused. Weedmaps also restated that its ads are self-published. “If an advertiser’s license information is flagged, we reach out to that advertiser to notify them of the discrepancy and request they review and correct any errors in their information,” a Weedmaps spokesperson wrote to Marijuana Business Daily. “If the advertiser does not take action to correct the information, they are removed from the platform upon completion of the review if they do not provide a valid license number.”

Reactions are mixed

The L.A.-based United Cannabis Business Association (UCBA), one of Weedmaps’ loudest industry critics, offered an olive branch when asked for comment by MJBizDaily. “We are glad to see that Weedmaps has begun working to remove unlicensed listings,” UCBA Executive Director Ruben Honig wrote in an emailed statement. “The removal of these shops … gives Weedmaps the opportunity to work as partners with Californians and the legal industry.” Adam Spiker, executive director of the L.A.-based Southern California Coalition, said he’s “going to take them (Weedmaps) at their word and hope for the best.” “I hope … they were true to their word. Because it will help the legal industry, and it can use all the help it can get. It’s dying,” Spiker said.

Though Weedmaps has made efforts, McGowan feels state regulators should take a stronger stance against the company and its advertising policies due to a law that took effect last summer authorizing the Bureau of Cannabis Control (BCC) to fine companies such as Weedmaps up to $30,000 a day per violation.

The BCC entered into the Weedmaps fight in 2018 by sending the company a cease-and-desist letter regarding its advertising for unlicensed marijuana companies. Weedmaps claimed protection under federal law, and, since then, state regulators have taken no action, even though they now have the power to collect large fines. This was established last summer by Assembly Bill 97, and can apply to any unlicensed company that the BCC deems to be engaged in commercial cannabis activity.

BCC communications chief Alex Traverso wrote in an emailed statement on Jan. 2 to MJBizDaily: “If the state finds that Weedmaps advertises illicit operators, then it will be treated like any other enforcement action. The Bureau does not provide comment regarding ongoing investigations.”

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Posted in Seed to Sale by State.