California Cannabis Companies Outnumbered 3:1 By Illegal Operators

A United Cannabis Business Association report has found about 2,835 unlicensed cannabis companies in California, with just 873 licensed operators, according to an NBC News report. The illegal operators, including storefronts and delivery services, outnumber legal operators 3-to-1 in the state.

UCBA president Jerred Kiloh said the numbers show that California is the only state with adult-use laws to “see a year-over-year reduction in legal sales.”

“We’ve yelled it from the mountaintop. We want better enforcement.” – Kiloh, to NBC News

Kiloh said that illegal businesses are thriving, in part, because of Weedmaps. Last year the Bureau of Cannabis Control sent a cease-and-desist letter to the company warning them to stop advertising unlicensed retailers on their site, or risk criminal and civil penalties. In August CEO Chris Beals announced the firm would no longer allow unlicensed businesses to advertise on the site, saying the U.S. retailers would be required to provide a state-issued license number on their listing. He said Weedmaps would restrict the use of its point-of-sale, online orders, delivery logistics, and wholesale exchange software-as-a-service platforms exclusively to licensed operators. Beals told NBC News that illegal operators would be completely removed from the platform by the end of the year.

“We don’t want to let Weedmaps dictate when they’re going to stop breaking the law,” Kiloh said in the report. “That doesn’t make sense.”

However, Kiloh said the that Weedmaps – and other places to find illegal operators, such as Google and Yelp – are “superficial” and the “underlying problem” is “insufficient licenses address market demand.”

In California, less than 25 percent of the state’s municipalities allow for cannabis businesses as the law allows towns and cities to ban operations.