Weedmaps Faces an Uncertain Future

Weedmaps has laid off a quarter of its workforce — a potentially ominous sign for the marijuana advertising company. And its legal entanglements with the state of California may be largely to blame.

Los Angeles Magazine explains:

A number of factors appear to have lead to the decision to axe a quarter of the company’s workforce. Weedmaps executives have placed some of the blame on their own overestimation of the speed at which more states would liberalize marijuana laws. Even within California, the company’s home market, many cities and counties have enacted municipal regulations that block local marijuana sales, limiting where Weedmaps can operate.

Perhaps the bigger hit to the company, however, has been its slow disentanglement from black-market pot shops that sell and advertise on its platform. Weedmaps came online in 2008, eight years before California’s Prop 64 was passed, when many marijuana sales were conducted outside the medical framework of the time. Even once adult-use sales were allowed, Weedmaps continued to allow unlicensed sellers to use the platform for their products.

Last year, the company received cease-and-desist letters from the state warning it to stop featuring illegal marijuana shops on its platform. This summer, Weedmaps announced it would no longer feature illicit cannabis businesses on its site. Earlier in the summer, the governor signed legislation cracking down on illegal cannabis companies.

According to Los Angeles Magazine, a Weedmaps weed museum, which we wrote about here, also turned out to be a bit of a money pit.

Read more about the layoffs and what they could mean for the company here