Since the year medical marijuana becomes legal in California, the state is struggling to curb the black market. There’s a wide range of illegal cannabis shops operating statewide, which affects business activities of cannabis firms that follow the state rules and regulations.
A new Assembly Bill 1417 proposes a crackdown on online advertisements by illegal and unlicensed cannabis businesses on advertising platforms such as Weedmaps. The websites violating the rules will have to pay $2500 per day. The objective is to stop the ads of illegal shops that influence the online search results in Los Angeles and other cities.
The United Cannabis Business Association (UCBA), which represents licensed marijuana companies in Los Angeles, is sponsoring the bill. “Our goal is to hold a level of accountability for these technology platforms that claim to just be a directory.”, said Jerred Kiloh, the president of the association.
Assembly Bill 1417 – Will It Work?
The new amendments in the Assembly Bill 1417 are-
- Any ad from a California cannabis business is required to add the state license number.
- Each violation will cost a penalty of up to $2500 per day.
- Allow stakeholder to bring civil suits against illegal shops.
The bill is expected to help legal cannabis businesses in California to grow their sales. According to them, because of illegal shops, they’re unable to receive benefits from online ads on popular platforms like Weedmaps.
They say that illegal shops can bid at lower rates because they aren’t paying taxes and following other regulations set by the state.
According to the owner of La Brea Collective, an LA-based dispensary, Daniel Sosa, Weedmaps.com is taking the customers away from legal marijuana businesses. He supports the bill, and said, “I think it’s necessary if they really want to capture real tax revenue.”
In February 2018, The California Bureau of Cannabis Control a cease-and-desist letter sent the owner of Weedmaps.com Ghost Management Group, to curb advertising unlicensed cannabis businesses.
Weedmaps.com refused to comply. In an interview with Marijuana Business Daily, the president of the website Chris Beals said that the bureau is putting the cart before the horse as there’s a vast majority of marijuana companies still unlicensed.
Eric Goldman, a professor at the Santa Clara University School of Law said that punishing Weedmaps and other sites would violate section 230 of the federal Communication Decency Act.
“The websites aren’t liable for the third party content providers. Even if it passes, the bill isn’t a good idea”, added Goldman.
However, as per the regulations of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MMUCRSA), to operate a commercial cannabis business in California, a valid license from the state licensing authority is required. Also, an advertising platform shall not display an ad unless they contain the license number of the advertiser.
In the past, The City of Los Angeles has also performed several efforts to shut down illegal cannabis shops, but they got limited success. These include-
- Shutting off the basic utilities—water and electricity
- Increasing fines for workers
- Padlocking their doors
Assembly Bill 1417 is a great move by The Golden State to shut illegal, unlicensed cannabis businesses. It will help licensed shops to receive full benefits from online advertisements on popular platforms such as Weedmaps.com.
How successful will it be in fulfilling its objectives—we can’t say anything until it goes into effect.