In a move intended to undercut California’s huge illegal cannabis industry, Weedmaps is the latest online cannabis dispensary directory to remove information on unlicensed shops from its website. According to a CTV News report, on August 21 Weedmaps announced that it will not allow illicit businesses to advertise on its platform.
Weedmaps, a popular website for people looking for cannabis products and shops, is based in Irvine, California. Founded in 2008, the site offers a huge selection of cannabis products, complete with information on the quickest route to stores and consumer ratings. The site also facilitates online orders with delivery.
Wikileaf CEO and Founder Dan Nelson likens the move to growing pains for an industry that’s fast becoming mainstream. Nelson and his Wikileaf team made similar decisions in late 2017 and early 2018 when it cracked down on unlicensed business listings on the site.
State regulators and licensed businesses had pressured Weedmaps to ban unlicensed businesses, claiming that the legal market was undercut by allowing the untaxed, unregulated product on the same site as licensed and taxed legal cannabis.
In a news release, Weedmaps promoted the policy change as part of a social justice necessity, but Nelson noted two additional driving forces to the data purge: feedback from dispensaries and plans to list on the Canadian Securities Exchange. The company looked closely at its compliance with state advertising regulations and laws surrounding unlicensed dispensaries, leading Nelson and his team to the decision to purge illicit business from its platform in order to take the company public.
“One of the most important and impactful promises of cannabis legalization is that it will give minority entrepreneurs the ability to enter the new industry and help reverse the damages inflicted on those disproportionately affected by the failed War on Drugs,” it said. “Unfortunately, as a result of limited access to capital and limited license opportunities provided by local governments, these entrepreneurs are actually finding it nearly impossible to participate in the legal market.”
Weedmaps said it would launch an initiative to support unlicensed, minority-owned marijuana businesses as they become licensed. The initiative includes providing participants with free training in licensing and compliance regulations, professional support and coaching, and free listing on the Weedmaps app for up to one year once they obtain their license. Later this year, the site would also require U.S. advertisers to provide state license numbers on their listings while also restricting the use of its point-of-sale system, online orders delivery logistics, and other services only to licensed businesses.
“These enhancements to existing safeguards on our platform will help patients and adult-use consumers find cannabis retailers that have provided evidence of state licensure,” Weedmaps Chief Executive Chris Beals said in the news release. “It also underscores our commitment to working with lawmakers and regulators to foster a flourishing legal market.”