In other words, illegal shops can sell pot at cheaper prices, sometimes 30 percent to 50 percent less. They are pitting us against each other.
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State regulators last month warned Weedmaps to stop advertising shops operating outside the law. The company sees the core of the problem as a scarcity of legal outlets and hefty taxes that scare off consumers from licensed shops, not its online ads. In Los Angeles, where the pace of city licensing has been sluggish, only about retail shops have authority to operate, while city officials acknowledge hundreds more are making illegal sales. Weedmaps says its experience dropping unlicensed businesses from its listings in Washington, Oregon, Nevada and Massachusetts had no impact on the size of those unlicensed markets.
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A key section of that law is designed to protect internet publishers, generally providing immunity to them for content posted by users. Responding to Ajax, Weedmaps did something almost unheard of for a cannabis company: But the Weedmaps situation is different.
Weedmaps enabled customers and buyers to find each other. Dispensaries with limited advertising options came to depend on Weedmaps to get the word out. Weedmaps declined to comment on its prices. As legalization gained traction, Weedmaps grew rapidly and gained a reputation for its tech-bro culture.
It was also a pillar of the cannabis community: The company says it now employs almost California residents. The core problem it first solved — connecting buyers and sellers — is not as pressing as it once was, at least in legal markets.
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