An audit of online ads finds California has nearly three times the number of unlicensed cannabis dispensaries and delivery services as licensed businesses.
California’s black market for cannabis is at least three times the size of its regulated weed industry, according to an audit made public Wednesday, the latest indication of the state’s continued struggle to tame a cannabis economy that has long operated in legal limbo.
that roughly $8.7 billion will be spent on unregulated cannabis products in California in 2019, compared with just $3.1 billion spent on cannabis sold by legal businesses.Officials have also warned that cannabis products sold in the illegal marketplace can pose health risks because the edible products, vaping pens and flower on shelves of illicit stores have not been subject to state testing.
Any attempt to quantify the number of unlicensed cannabis sellers in the state would be an estimate. The Bureau of Cannabis Control does not track such data, and there are illegal marijuana businesses in California that do not advertise on Weedmaps.The UCBA presented the audit’s findings in a letter to Gov. Gavin Newsom and the cannabis agency early Wednesday and called for a crackdown on Weedmaps, which many in the cannabis industry have criticized for amplifying the reach of illegal sellers.
The trade association also called on the state to retroactively impose millions of dollars in fines on Weedmaps under Assembly Bill 97, legislation that passed in July and allows for $30,000 in penalties for each day a cannabis retailer operates without a license. Some have interpreted the law to mean that Weedmaps should also be subject to those fines for allowing unlicensed dispensaries to advertise without a license.
The cannabis bureau also sent a cease-and-desist letter to Weedmaps last year, demanding that the website stop working with unlicensed operators. But Weedmaps has argued in the past that it is protected from such orders under Section 230 of the 1996 Communications Decency Act, which has shielded platforms like Facebook and YouTube from responsibility for the content their users post.
“While these policy changes will only have a symbolic impact on the size of California’s unlicensed market without more licensing opportunities and other large listing platforms following suit, we want to continue to lead by example,” Beals said in a statement.
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