Weedmaps Taking Down Fake Shop Listings

If you’re in the cannabis business, Weedmaps is a fact of life. The popular online dispensary directory is the go-to resource for customers looking to find local cannabis suppliers and brands, browse dispensary menus, and place orders online. Whether or not you choose to pay their steep fees for sponsored listings, Weedmaps can’t be ignored.

For years, state regulators in California—where Weedmaps is based—have taken issue with the company’s policy of listing black-market dispensaries. Now, the company is belatedly taking action: Since the start of 2020, Weedmaps has removed roughly 2,700 listings of illegal dispensaries from its site.

Make no mistake: This is a major victory for licensed dispensaries. Here’s a little more about what this change means, as well as some cautionary notes about ways in which some of its benefits might be thwarted.

Weedmaps: Skirting the Edge of the Law

Lawmakers’ (and legal dispensary owners’ ) gripes with Weedmaps are nothing new. Arguing that simply ignoring the black market in cannabis is unrealistic, the company hasn’t discriminated when it comes to their customers’ legal status, accepting advertising dollars from any business describing itself as a dispensary, legal or not.

But until recently, Weedmaps had little incentive to change its policy. Last year’s Assembly Bill 97—which provides for penalties of $30,000 a day for those who promote unlicensed cannabis businesses—changed that. What’s more, the company was feeling the squeeze both in California, where many municipalities have blocked the sale of cannabis, and of an overall slower-than-expected pace in statewide cannabis legalization. In October, the company laid off nearly 100 employees, or roughly a quarter of its workforce.

The cuts may not help much. According to one analyst, in carrying through on its pledge to delist fake dispensaries, the company lost just under half of its retail ads. A Weedmaps spokesperson claimed that the loss of revenue “did not have a significant impact” on the company, and that it will be recouped by increased efficiency and business from licensed dispensaries.

Weedmaps: Potential Loopholes

Weedmaps now requires dispensaries to provide a state license number or state that they only sell CBD products that don’t contain THC, the cannabinoid responsible for the cannabis plant’s psychoactive “high.” That said, the company hasn’t provided evidence that they have a process in place to validate dispensaries’ claims of their legal status (or their stock), opening the door to further complaints about a lack of oversight.

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It remains to be seen whether or not Weedmaps will tighten its scrutiny of individual listings in the weeks to come. As detailed in an article in the Times-Standard, a California North Coast news outlet, as of January 2nd the number of listings on the website was more than double the number of California’s legal dispensaries. Further investigation determined that at least one “CBD-only” dispensary in a municipality that had prohibited sales of THC was in fact selling psychoactive cannabis from the back of its unmarked storefront.

The Upshot

While doubts about Weedmaps’ dedication to transparency persist, there’s little doubt that the company’s decision to drop illegal dispensaries is a victory for owners of legal ones. The threat of unleashing Assembly Bill 97’s clout appears to have provided the necessary incentive for the company to stop (or at least curtail) its shady business practice.

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And for better or worse, Weedmaps may be the biggest game in town, but they’re not the only dispensary listing platform. As industry-watchers point out, the issue of fake listings isn’t limited to Weedmaps; Google, Yelp and other sites provide listings of unlicensed dispensaries, unwittingly or not. Hopefully, Weedmaps’ course correction will help set a new standard in the fast-moving world of dispensary marketing: One in which licensed and law-abiding businesses won’t have to pay unscrupulous platforms in order to compete with black-market operators.