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WEEDMAPS’ SWEEPING SUBPOENA

In a nice scoop, MJBiz‘s John Schroyer obtained Weedmaps’ federal grand jury subpoena. The Yelp-like service is based in Orange County, Calif.

Key details from the MJBiz story:

  • The subpoena delivered to Weedmaps-owner Ghost Management Group, demands extensive documentation about the business and financial operations, as well as communications with nearly 100 cannabis businesses, both licensed and not.
  • “The bottom line is the feds are showing they’re not done investigating cannabis, not done prosecuting cannabis,” California attorney Matt Kumin said.
  • It’s not clear who or what the investigation, which appears to be ongoing, is targeting. “This could be a million things,” California attorney Jessica McElfresh said.
  • Attorney Henry Wykowski, who represented dispensary Harborside in cases against the federal government, speculated that the feds seemed to be focused on “recordkeeping and financial affairs, so that would gravitate toward some type of tax or financial misreporting type of offense.”
  • The investigation originates from California’s more conservative Eastern District. U.S. Attorney McGregor W. Scott has previously indicated that he is not prioritizing state-licensed businesses.
  • MarketWatch first broke the story that the September 2019 subpoena existed, but didn’t obtain the document. 
  • Weedmaps says it is cooperating, but didn’t say whether it has submitted the requested documents.

Weedmaps provoked the ire of California’s industry when it continued to accept advertising from unlicensed dispensaries, despite a cease and desist letter from the state’s Bureau of Cannabis Control.
Los Angeles Times

  • In August 2019, a month before it received the subpoena, Weedmaps said it would stop accepting unlicensed ads in 2020. It appears largely to have done so.
  • Weedmaps was often essential for unlicensed businesses to reach consumers.

????WW California has more.

Quick Hit

  1. In another action, the Federal Trade Commission sued a California CBD business for making unproven claims about COVID-19.
    Marijuana Moment