Audit Finds Nearly 3K Illegal Dispensaries in California

[dropcap class=”kp-dropcap”]T[/dropcap]he United Cannabis Business Association (UCBA) publicly released an audit on Sept. 11 that found nearly 3,000 illegal cannabis dispensaries in California, which would make the black market over three times the size of the state’s regulated industry.

According to the audit, the UCBA found 2,835 unlicensed dispensaries and delivery services operating in California. Compare that to only 873 cannabis retailers in the state with licenses, according to the Bureau of Cannabis Control (BCC).

After counting the number of illegal dispensaries, the UCBA sent a letter to Gov. Gavin Newsom and the BCC to inform them about the findings. The audit focused particularly on Weedmaps, the online dispensary directory.  “Every day that Weedmaps continues to advertise for unlicensed retailers they are putting consumers at risk and suppressing the growth and very existence of the legal market,” the letter said. “The unlicensed operators on Weedmaps do not pay taxes or the cost of compliance with local and state regulations, do not follow required worker or consumer protections and do not allow labor unions to organize workers, in turn allowing them to charge a fraction of the cost. Put simply, these retailers, that are allowed easy access to the public through Weedmaps, profit without contributing to California while risking the health and safety of our state’s residents.”

Weedmaps, however, announced on Aug. 21 that it would be dropping unlicensed dispensaries and delivery services from its platform. Weedmaps representative said that it is “nearly impossible” for businesses to provide access to cannabis given the limited number of licenses in California. But the UCBA is seeking to punish the service with retroactively applied fines.

Lawrence Mansour, chief technology officer for APOP Media, a UCBA member, said that according to his own counts, he found 3,757 listings on Weedmaps. The UCBA claims that Weedmaps should have to pay millions of dollars in fines. According to the UCBA, under AB-97, there are $30,000 penalties for each day that an illegal dispensary operates without a license, and some industry leaders figure that Weedmaps should be held liable.