Two online cannabis platform and dispensary locators, Weedmaps and Leafly have found themselves at the wrong end of the regulatory spectrum and each is taking a very different position to Cease and Desist Orders issued by the Bureau of Cannabis Control (BCC) demanding that they stop displaying advertisements from unlicensed cannabis operations and also claiming that the companies are aiding and abetting in violations of California state cannabis laws.
In a response letter to BCC chief Lori Ajax and the agency, issued this week. Weedmaps claims that they are not subject to the BCC’s regulatory oversight because they are a “technology company and an interactive computer service,” and thus they are protected under Section 230 of the USC Title 47, a 1996 law which states that such internet service providers (ISPs) should not be treated as the publisher of information provided by 3rd party sources but also states that criminal claims are an exception.
The letter also says that, with regards to licensed dispensaries, Weedmaps is compliant with state law; and that if the BCC is so concerned about unlicensed dispensaries, the bureau should focus on fixing the broader institutional problems surrounding the issue instead of trying to go after individual persons or companies.
Leafly on the other hand has announced that it intends to update its listings to exclude unlicensed dispensaries. “Leafly’s mission is to help consumers make informed choices about cannabis and where to find it,” reads a statement issued by Leafly. “The California state government has made clear that only licensed retailers and delivery services may advertise via technology platforms.”
Two very different directions on a not so uncomplicated issue.
Breaking it down, what are we looking at?
In its simplest form, it’s a high profile illustration of how the majority of stakeholders in the cannabis industry will sooner rather than later find themselves at the fork in the road and faced with making a decision to choose a path that ends on either the right or the wrong side of the new regulatory mandates, and in California the line dividing the sides isn’t always clearly defined.
It’s never pleasant to face the fork, so it’s important to know what you stand for and where your lines are.
Here’s the deal. We have a lot of competing laws coming into play in California’s transitioning cannabis market(s); the sunsetting of the Compassionate Use Act (CUA), mandatory under Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), the Business and Professions Code, the California Penal Code, the UCSA and now Section 230 of Title 47 just to get us started.
We also have a lot of competing interests at stake like the survival of the medical arm of MAUCRSA and access to affordable medicine, mitigating unfair competition by unlicensed operators and ensuring a path to compliance and licensure for those stakeholders that have forged this industry in decades past.
But interests aside, Chief Ajax’ is focused on California’s aiding and abetting law, Penal Code 31, which in relevant part states:
“All persons concerned in the commission of a crime…whether they directly commit the act constituting the offense, or aid and abet in its commission, or, not being present, have advised and encouraged its commission…are principals in any crime so committed.” Thus, those persons who are commonly referred to as “accessories” or “accomplices” as well as those who actually perpetrate the offense, are to be prosecuted, tried and punished as principals in California. (Penal Code Section 971) Essentially Ajax is arguing that by advertising unlicensed dispensaries, which are violation of state cannabis laws, Weedmaps is aiding and abetting those dispensaries in breaking the law.
Weedmaps is not the only cannabis company running afoul of the BCC. According to 420Intel, the BCC has issued over 900 cease-and-desist letters to unlicensed cannabis companies since Jan. 1, 2018.
Will the BCC levy fines or file charges against Weedmaps or its owners?
Will the DOJ take interest in the appearance of regulatory defiance?
Will the 230 defense insulate Weedmaps from action?
Maybe. Maybe not. But what is clear is that this issue serves to highlight the need for those participating in the cannabis industry to be prepared to know where they stand when faced with a fork in the road, even if it is merely whether you buy your cannabis from an unlicensed or licensed operation as a consumer.
While the regulatory system in California is daunting and far from where it needs to be, it is critical that we support the existing regulatory mandates while we work to improve the regulations to better accommodate the interests of all stakeholders.
So about taking the high road and supporting legal cannabis operations acting in good faith such as Leafly? I think the path to take is clear – to do otherwise would only weaken the legal cannabis industry and strengthen arguments in favor of federal interference.