Licensed Cannabis Retailers in California, and the Legal Market, Stand to Benefit from Changes to Weedmaps Business Practices


Implementing Changes Requiring State License Number to Use Their Services

Weedmaps, an online
directory and sales platform for cannabis retailers, announced in a recent press release, “Beginning later this year, US retail advertisers on
Weedmaps will be required to provide a state license number on their listing.”
It continued, “The company is also restricting the use of its point of sale,
online orders, delivery logistics, and wholesale exchange software-as-a-service
(SaaS) platforms to licensed operators exclusively. In addition, Weedmaps will
explore ways to make it easier for patients and adult-use consumers to identify
the license number on advertised listings.”

Although the announcement
was situated near the end of a lengthy press release touting Weedmaps’
initiatives to support businesses that qualify as social equity and
minority-run, it is a significant shift in California’s cannabis market. Since
the opening of the Golden State’s licensed system, at the beginning of 2018,
businesses that have gone through the processes of obtaining local and state
permits have complained that unlicensed retailers and delivery services were
allowed to advertise on Weedmaps. As a result, consumers could easily find
illegal storefronts, which can frequently undercut licensed ones on price due
to not paying taxes, fees, and other compliance costs.

California cannabis
regulators responded positively to the news. According to a press release
from the state Bureau of Cannabis Control (BCC),
“Yesterday’s announcement by Weedmaps is a step forward for the legal
California cannabis industry, which will aid consumers in identifying licensed
cannabis businesses when looking to purchase safe cannabis. The Bureau is
continuing enforcement activities against businesses not complying with
cannabis advertising laws.”

When Weedmaps will
actually cease to post advertisements for unlicensed businesses, in addition to
delisting ones currently advertising on the site, remains unspecified. A report
from the Los Angeles Times
describes the reaction from operators in California’s
legal industry as cautiously optimistic.

Presuming that Weedmaps
does follow through with its recent announcement, however, cannabis consumers
in California will likely have a significantly more difficult time locating
illegal outlets. Such a development should push more of the state’s latent
demand into the regulated market, especially in Los Angeles, where the issue of
unlicensed sellers competing with licensed ones has been particularly acute.


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