More than a year after recreational marijuana sales became legal in California, cannabis businesses that are following state rules are struggling to compete with a black market that’s still thriving.
Now, legal shop owners are backing a new state assembly bill that would stop websites from hosting ads for unlicensed weed businesses.
Assembly Bill 1417 would require online review sites like Weedmaps (think Yelp, but for weed) to include state license numbers on all of their digital pot shop ads. The aim: to get rid of ads for illegal shops that currently dominate search results in cities like Los Angeles. Each violation would cost websites up to $2,500 per day.
“Our goal is to hold a level of accountability for these technology platforms that claim to just be a directory,” said Jerred Kiloh, president of the industry group United Cannabis Business Association, which is backing the bill, and owner of a Sherman Oaks dispensary.
“They’re not taking any responsibility that they are emboldening an illicit market,” he said.
WHY ARE WEED ENTREPRENEURS FIGHTING WITH WEEDMAPS?
Legal shop owners in Southern California say they’re getting crushed on Weedmaps. Unlicensed shops can advertise much lower prices on these platforms, because they’re not paying taxes or following costly regulations.
Daniel Sosa, owner of the LA dispensary La Brea Collective, thinks Weedmaps is funneling customers away from licensed shops like his.
“They advertise prices we can’t realistically do,” Sosa said. “These platforms are driving money and consumers away from the legal market.”
COULD WEEDMAPS BE HELD RESPONSIBLE FOR THIRD PARTY ADS?
Weedmaps did not respond to LAist’s requests for comment. But so far, the Irvine-based company has resisted efforts to take down ads for unlicensed shops in California.
Last year, the state’s Bureau of Cannabis Control sent Weedmaps a cease and desist letter. But the company said it does not hold a state cannabis business license, so it’s not subject to the agency’s purview.
Santa Clara University School of Law professor Eric Goldman said any law that would punish sites like Weedmaps for third party advertisements would violate part of the federal Communications Decency Act called Section 230 — making it subject to legal challenges.
Published: April 02, 2019
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