Weedmaps prepares to ban ads from unlicensed cannabis sellers

Bethan Rose Jenkins, Cannabis News Writer/Editorial

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In an attempt to stop unlicensed cannabis dispensaries from advertising their services to prospective customers, Weedmaps has announced it will be cracking down on illegally-operating businesses.

The news of Weedmaps banning unlicensed cannabis companies indicates that online black market activity could be curbed from here on out. Despite the fact that the plant has been legalized to some extent in 33 U.S. states and the District of Columbia, the illicit cannabis market in the United States is thriving.

Earlier in 2018, L.A. Times analysts discovered that as many as 220 unlicensed cannabis dispensaries in the Los Angeles area were advertising illegally on Weedmaps. Attempts have previously been made to tackle the black market in California, but they weren’t successful. Weedmaps offers a glimmer of hope for licensed dispensary owners who want to reduce the risks of their profits being snatched by unlicensed cannabis companies.

Weedmaps banning unlicensed cannabis businesses has been a long time coming

Licensed cannabis business owners are unhappy about the delay in Weedmaps banning unlicensed cannabis companies from their advertising platform. Many are wondering why it has taken so long for any action to be taken.

Weedmaps was given the push to ban unlicensed sellers in February 2018, when the Bureau of Cannabis Control (BCC) issued a cease and desist letter stating that the company was stepping over the boundaries of federal law by advertising illegal cannabis dispensaries. However, Weedmaps successfully fought against the allegation as per Section 230 of the 1996 Communications Decency Act.

The site enables dispensary owners to upload menus, images and relevant information that can be perused by customers, who are also invited to rate businesses and share their opinions in the form of comments. Cannabis businesses in the U.S. can also pay extra for a higher ranking to increase visibility and consumer reach.

Businesses who have not obtained the proper licensing to carry out cannabis retail operations in the U.S. are undercutting legal, licensed companies by snatching profits and dodging the expense of paying local and state taxes. This has infuriated legally-operating businesses, many of whom rely on sites like Weedmaps to broaden their target audience.

Competitor site Leafly said earlier in the year that it would forbid unlicensed cannabis companies from advertising on its site.

Freeze on unlicensed operators yet to be implemented by Weedmaps

Black market sales bite a huge chunk out of the legal cannabis market, with fiscal analysis suggesting that illicit weed sales will top $8.7 billion in 2019. Compared to the predicted expenditure for products sold in licensed cannabis dispensaries, illegal sales eclipse the amount by almost triple.

Fortunately, the news of Weedmaps banning unlicensed cannabis companies from advertising on its site indicates positive progress in weeding out the black market. On the other hand, critics are fearful that unlicensed operators will continue to thrive and put legal businesses at risk.

Although a date on which the ban will go into effect is yet to be announced, a spokesman for Weedmaps named Alex Clark says that the company will continuously strive to promote the nation’s legal cannabis market.

“Weedmaps always has and will continue to advocate for a flourishing, legal cannabis market, and taking action to address social equity is integral to making that a reality. Our announcement reinforces that commitment and outlines the program we are implementing to support minority entrepreneurs in the cannabis industry,” reassured Clark.