For some time now, California-based marijuana companies have enjoyed significant leeway when it came to online advertising. However, things are changing, and they’re changing very quickly.
Weedmaps is one of the most successful marijuana-related online advertising companies. The firm hosts ads for an incredible number of businesses across the US, including many in California. In February 2018, the company was served a cease and desist letter by the California Department of Consumer Affairs Bureau of Cannabis Control. The letter stated that Weedmaps was “engaging in activity that violates state cannabis laws”.
Specifically, the platform is coming under fire for hosting advertising from unlicensed marijuana businesses. The letter specifically stated, “Your website contains advertisements from persons offering cannabis and cannabis products for sale that are not licensed to conduct commercial cannabis activity; therefore, you are aiding and abetting in violations of state cannabis law.”
Weedmaps has also come under fire from many other sources, including the city of Sacramento. If the website does not comply, there could be legal ramifications for them. How does the Bureau know that these companies are unlicensed? It does not know that for a fact, although it’s strongly suspected. The real issue is that California state law requires any advertising for a marijuana-based business to include the company’s license number. Weedmaps does not include that number on any of the advertisements in supports.
The Impact for Weedmaps
Even if Weedmaps complies with the cease and desist letters and no longer hosts advertising for unlicensed marijuana businesses, the company is still going to experience a significant impact. Estimates of the value of that unlawful advertising point to potentially millions of dollars in lost revenue.
What Does This Means for the Cannabis Advertising Industry?
For a long time, marijuana related advertising was not heavily policed, and laws regarding advertising unlicensed marijuana businesses were not particularly enforced. That is changing today, and the action against Weedmaps is an obvious sign of this shift, but they are not the only ones currently the sights of state authorities. The Bureau of Cannabis Control has actually sent out close to 900 similar letters to date, with 400 of those occurring just within February and March 2018.
While Weedmaps might be the problem child of the moment, it is not the only online company being targeted by the California state government. Leafly has already received cease and desist letters from the Bureau. In response to that request, the company removed approximately 750 listings, dropping their count of California-based marijuana businesses from over 1,000 to around 300.
Ultimately, many of those businesses Leafly de-listed, and those that Weedmaps is being required to remove, will return. Most of them are not illegal operations, but simply companies trying to make their way through the state licensing process that have jumped the gun on advertising before receiving their official license.
Still, the crackdown is a sign of things to come. California is keeping a very close eye on Internet-based marijuana advertising, and the Bureau of Cannabis Control is very serious about its mission.