California's cannabis black market has eclipsed its legal one
- People stand in line to get into MedMen, one of the two Los Angeles area pot shops that began selling marijuana for recreational use under the new California marijuana law today in West Hollywood, California on Jan. 2, 2018.
"The real underlying problem is that there’s insufficient licenses address market demand," said the CEO of Weedmaps.
Although marijuana has been legal in California for nearly two years, black market weed is still a booming business in the state.
Illegal sellers outnumber legal and regulated businesses almost 3-to-1, according to a startling analysis of California cannabis sellers released this month. Some critics blame the website Weedmaps for letting thousands of rogue stores advertise.
But cannabis regulators are cracking down. This week, they put publications, including Weedmaps, that advertise unlicensed marijuana businesses on notice that doing so is against state law.
"Failure to comply with the requirements for advertising may lead to significant financial penalties," the Bureau of Cannabis Control said in an email to the industry Tuesday.
The sellers analysis, which was completed by an association of legal marijuana businesses in the state, punctuates a tough year in an industry that launched with great promise in 2018 but soon faced heavy challenges including, a lockout of legit sellers in most of the state's cities, enforcement challenges and high retail taxes.
Critics say those hurdles have only emboldened an expanding black market.
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