Weedmaps makes good on pledge to drop rogue California marijuana shops, though bad actors find loopholes
Facing massive fines from state regulators, Irvine-based Weedmaps has taken major strides toward fulfilling its pledge to drop ads for illicit cannabis shops from its online directory, cutting about 2,700 rogue stores from its site since the start of this year.
The company’s long-awaited move to follow state law is drawing praise from legal cannabis operators. Some licensed stores have seen an uptick in business since Jan. 1, a trend they attribute to Weedmaps making it more difficult for potential customers to find unlicensed competitors.
But Weedmaps’ new filtering system hasn’t prevented all unlicensed operators from advertising on the site, and many in the regulated market are hoping for even more diligent screening by the prominent, industry-driving platform.
“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,” said Jackie McGowan, a Sacramento-based cannabis consultant who’s been tracking Weedmaps’ listings for two years.
As of Jan. 1, retailers must provide a state license number or sign an agreement saying they only sell products containing CBD — a compound in cannabis that doesn’t make consumers high and is largely unregulated by the state — in order to have their ads show up on Weedmaps.com.
But the company does not have a process in place to verify the validity of the license number, or any way to make sure a store is only carrying CBD products. Weedmaps has always insisted that shops publish their own information, which has been their defense in the past against complaints that they’ve permitted ads for illicit businesses.
That system is allowing unlicensed cannabis retailers to stay on the site by tacking “CBD” to their names, McGowan said, noting that companies in the CBD category don’t need to enter a business license number to advertise. Other rogue advertisers, according to McGowan, “are simply entering legal cannabis license numbers that they are poaching from real licensees.”
The number of marijuana retail ads posted on Weedmaps fell from 5,610 on Dec. 31 to 2,920 on Jan. 3, according to McGowan, a drop of 2,690 illicit shops, or about 48% of Weedmaps’ retail ads.
But the number of ads on Weedmaps’ site is still more than double the number of licensed cannabis retailers in California. While it’s unclear how many of those licensees might have multiple legitimate listings on Weedmaps — say for the same delivery service in different areas or for experimental ideas, such as kiosk sales — it’s also easy to find examples of operators that are clearly taking advantage of loopholes in the platforms’ rules.
On Jan. 2, for example, Weedmaps listed an ad for Bud Bud & Beyond in Costa Mesa. Costa Mesa doesn’t allow cannabis shops, so the ad said the storefront only carried CBD products. But a visit to the location that day showed it was just like the underground shops that have dominated California’s cannabis market for two decades, with a worker confirming that traditional marijuana products were being sold out of the back of the signless shop.
After the Register inquired about Bud Bud & Beyond, that ad disappeared off Weedmaps.
The Irvine-based company appears responsive when anyone flags bad actors on its site. A Weedmaps spokesman encouraged people to send concerns about listings to email@example.com.
Impact remains to be seen
While Weedmaps is still the first website to show up when most people search online for marijuana stores, other sites also promote cannabis shops, and many continue to carry listings for unlicensed retailers.
Google and Yelp, for example, still carry listings for Church of Newport Mesa, a long-standing illicit marijuana store in Costa Mesa. The shop sent a text message to customers Saturday letting them know the store won’t be on Weedmaps anymore, but that shoppers can read the full product menu on the store’s own website. And they offered free products as incentive to encourage shoppers to leave positive reviews on Google and Yelp.
BudTrader.com, a listing service that counts former House Rep. Dana Rohrabacher as a board member, also carries ads for hundreds of unlicensed cannabis sellers throughout the state. Ads posted on the site on Wednesday Jan. 8 offer a pound of indoor-grown cannabis in San Diego for $1,500 or cannabis wax in Garden Grove to anyone who is not employed in law enforcement.
It’s not clear whether California regulators will also target those sites, with a 2019 law that makes it possible for the state to fine advertising sites up to $30,000 a day for each violation.
Still, because 12-year-old Weedmaps is by far the biggest online cannabis advertiser, the company’s shift away from rogue stores is expected to boost the state’s still struggling legal market.
Chris Glew, legal adviser for the The Joint, a licensed shop in Santa Ana, said his store noticed a minor uptick in revenue in the first two days of the year after the change at Weedmaps. He expects it will be 30 to 45 days before they’ll notice any substantial changes.
Despite the overnight loss of an estimated 2,690 customers in California, a spokesman for Weedmaps insisted that unpublishing those ads “did not have a significant impact” on the company. He said they’re actually growing thanks to new technology products, listings from outside of California, and “significant increases” in spending from licensed California players, who will now have far less worry about being listed alongside unregulated shops selling products for half the price.