Cali Lawmakers Set Their Sights on Weedmaps with AB 1417

Love it or hate it, there is no denying that Weedmaps has been the go-to hub for vast swaths of the cannabis culture to get their fix for over a decade now.

Once a highly popular digital social hangout with active forums, Top Reviewers, and profile pages that actually got traffic, the site has followed the arc of the cannabis scene itself in Cali to essentially become a mostly utilitarian platform for conducting business. Cultivating culture… not so much.

Ironically, the more legal cannabis gets, the less of a need the public has for a site like Weedmaps, as useful as it has been in the past.

With the passage of Prop 64 in the company’s home state of California, the ultimate struggle for the newly formed legal market has been trying to figure out how to compete with the well-established street market that thrives unburdened by the state’s clumsy regulatory framework.

As a purely digital platform that does not touch or sell any state-regulated products, Weedmaps rides a fine line whereby they absolutely stand to profit from the legal cannabis market in Cali without being subject to its strict oversight.

That’s nothing new, countless ancillary companies work tangentially with the cannabis industry without needing to be licensed by the state, but Weedmaps is openly playing both sides of the marijuana market as a majority of the listings on their site lead visitors to storefront dispensaries or delivery services that, like Weedmaps, do not answer to the Bureau of Cannabis Control or really anyone else for that matter.

This has led to many legal cannabis businesses pulling their listings from the site in protest, hoping to convince the powers that be at Weedmaps to stop serving the black market. But as with any corporation it just comes down to the bottom line and the pathetic rate at which the state is issuing licenses means that there are way, way more potential clients on the streets than there are in the legal market.

Others still are calling for legal retribution against the mapping mogul in a last ditch attempt to restore legitimacy to the crippled legal market.

Ironic, considering that Justin Hartfield – founder and former CEO of Weedmaps – was one of the most outspoken advocates in favor of Proposition 64.

What is not ironic is that he bounced from the company in 2016 to pursue other ventures… just in time to miss the brunt of the legal drama the company now faces.

Assembly Bill 1417 is currently making its way through the sausage making process of state politics and if passed as written will open the door for lawsuits and fines against Weedmaps if their business model does not evolve.

United Cannabis Business Association (UCBA) president Jerred Kiloh released a statement on April Fool’s day, but his tone makes it clear that he does not consider the topic to be a laughing matter, stating, “[S]ince voters approved Proposition 64, which allows legal, licensed and regulated cannabis operations, the illegal cannabis market has flourished and this unchecked ability to advertise has given these illegal activities a huge advantage over legal operators. Consumers have no way of determining if the cannabis retailer they visit is safe, legal or licensed. This means, the products are most likely not tested and that illegal operators are not being held accountable to anyone, including the police.”

The trigger language in AB 1417 is that anyone advertising cannabis would be forced to include a state-issued license number on every ad or face a fine of up to $2,500 per day as well as the liability of civil litigation from aggrieved third parties (ie. your starving competitors).

Really, it is pretty standard practice – this is how it works in mainstream industries like construction or real estate.

So, not only would Weedmaps itself have to display a license number of its own – a difficult feat since they don’t fall under any of the current licensing criteria (ie. cultivation, processing, manufacturing, distribution, testing, retail, etc.) – but they would also be liable for every single ad placed on their site that does not have a valid license number prominently displayed on it.

$2,500 per day, per violation.

This proposed legislation appears to be aimed directly at Weedmaps as they have ignored all demands so far to make their platform exclusive to the handful of legal, licensed entities in the state. But other cannabis-infused platforms like Eaze could face a similar wrath.

A Weedmaps rep responded to the threatening new legislation in their standard fashion, saying, "Weedmaps has zero intentions of working with law enforcement to try and decipher who is and is not illegal according to state laws. And Weedmaps is not a policing agency, nor will it ever be.”

Weedmaps defends its business model by comparing themselves to seemingly innocent retail traffic aggregators like Yelp! or even Google Ads, and so far, it has kept them moving ahead in spite of growing opposition.

They bring up a very interesting point. We’ve seen a rollercoaster or responses from social media outlets like Facebook and Instagram regarding cannabis-related advertising. Just as it appeared that the tidal wave of cannabis reform had finally forced them to cave on their blanket prohibition of weed ads, a law like this would be all it takes to shut that option back down indefinitely… for ALL cannabis businesses.

It is a tough call these days. It is easy to see the argument from both the legal side of the industry and the street side. We just hope that the scene doesn’t cut off its nose to spite its face.

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