Weedmaps defends ad practices to cannabis czar, citing law that protects Facebook and Twitter

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A popular marijuana website has told the state’s cannabis czar that she lacks the authority to make the company stop running advertisements for unlicensed pot retailers.

In a letter sent Monday to Lori Ajax of the Bureau of Cannabis Control, Doug Francis and Chris Beals of Weedmaps.com said the company is not licensed by the bureau and therefore not subject to its enforcement.

They also said Weedmaps is protected from such action because the company is an “interactive computer service” covered under the federal Communications Decency Act. The law states that such a service shall not be treated as the publisher of information provided by a third party.

The CDA is seen as providing legal protection for Facebook, Twitter and other Silicon Valley giants that rely on consumer-generated content. The protection clause cited by Weedmaps has been successfully used a legal shield by companies facing criminal prosecution, including Backpage.com, a classified advertising site that has contained sex ads.

The letter was sent in response to Ajax’s request last month that Weedmaps stop allowing unlicensed retailers to advertise on the website, which serves as something similar to Yelp for cannabis, providing listings of dispensaries, delivery services and doctors who make recommendations for marijuana.

Weedmaps charges cannabis companies anywhere from hundreds to thousands of dollars each month to advertise on its site.

Ajax told Weedmaps to stop “engaging in activity that violates state cannabis laws” by advertising unlicensed retailers and by failing to publish license numbers for legal and illegal retailers.

Hundreds of dispensaries and delivery services advertise on Weedmaps in California, far more than the number of companies licensed by the Bureau of Cannabis Control.

Weedmaps’ response to Ajax places the responsibility for having a license on the companies that use Weedmaps, saying “any groups that place information on our site represent and warrant that they are in compliance with local law.”

The letter goes on to say the company believes many of the unlicensed businesses are protected under state law until next January because they are cannabis cooperatives. Under the state’s old medical marijuana laws, cooperatives were non-profit entities created solely to provide cannabis to members. State law eliminates the status of cooperatives under a sunset clause.

Ajax was not available for comment Monday afternoon. However, Joe Devlin, Sacramento’s chief of cannabis policy and enforcement, has said that at least part of Weedmaps’ argument isn’t valid because the illegal retailers on Weedmaps are not nonprofit, as evidenced by the fact that they are advertising on the site.

Weedmaps’ spokesman Carl Fillichio did not respond to requests for comment.

In its three-page letter to Ajax, Francis and Beals focus on what they described as problems hindering retailers from becoming licensed. Saying that “native California licensees operate under a regulatory landscape that is so blurry it stifles investment,” the executives complain about high tax rates, among other things.

About 85 percent of the state does not allow commercial marijuana sales because of local control provisions in the 2016 legalization law approved by voters.

©2018 The Sacramento Bee

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