Complaints made to California state officials and federal authorities allege that online cannabis advertising behemoth Weedmaps is once again promoting marijuana retailers and products that are unlicensed and illegal.
As our Los Angeles cannabis lawyers understand it, the complaints, filed a few months ago with the state’s Department of Cannabis Control and the federal Securities and Exchange Commission, assert that the executives at Weedmaps has opened to the door to black market marijuana purveyors, giving them a platform where customers can find them, as well as products that exceed safe, legal THC levels. The complaints assert that Weedmaps is aware that they are facilitating black market business and sales through their website, but has failed time and again to take action to stop it.
Black market activity, of course, directly harms legal, licensed businesses. This is well-established. The complaint alleges that Weedmaps is giving underground operators an edge competitively by allowing them to advertise on the platform. Inevitably, they’re going to be able to sell their product (which isn’t heavily taxed and hasn’t undergone rigorous testing) at much lower rates. Although Weedmaps purports to serve the legal market, this practice ends up undercutting that stated objective.
You may recall, it’s been a little over four years now that Weedmaps caught the ire of state authorities over allegations of illegal advertisements. The company, based in California, took down some of its online advertising two years ago, prior to going public last year.
The current complaints were made by leaders at a Los Angeles-based licensed marijuana company. They say they first went to Weedmaps directly with their concerns, but the business was unresponsive. As a result, they say, their legal firm has incurred substantial losses, potentially in the tens of millions of dollars. So when it appeared Weedmaps had no intention of taking action, the executives turned around and gave reams of reported evidence and documentation of these violations to state and federal regulators. If the company is found to have engaged in wrongdoing this time around, it could face very substantial regulatory fines.
That isn’t a guaranteed outcome, but it’s worth noting that similar advertising practices were precisely what got Weedmaps in hot water with California authorities back in 2018.
A spokesperson for the company declined to comment to MJBizDaily. Representatives for the regulatory agencies say they have launched investigations.
MJBiZDaily reported that it had independently verified some of the allegations against the online platform, identifying numerous live pages with advertisements for unlicensed retailers and unlawful products.
Among the ads the publication identified:
- Advertisements for edibles that are far too potent to be legal, including THC gummies and brownies with more than 1,000 milligrams of THC.
- Advertisements for cannabis companies that don’t display the company’s license number, despite a policy that required this in 2020.
- Advertisements that display state license numbers belonging to a different business than the one the ad is about.
- Advertisements for operating hours that are outside the legal parameters, such as cannabis deliveries after midnight.
The complainants say the “trust and safety team” at the online platform is nothing more than a front to assert plausible deniability. In addition to involving state and federal regulators, the complainants say they are considering civil litigation against Weedmaps.
Weedmaps again advertising illegal marijuana retailers and products, complaints allege, July 25, 2022, By John Schroyer, MJ Biz Daily
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