Over the last few months, there’s been some circulating rumours and whispers that the mega-giant dispensary directory, Weedmaps, will be shutting down due to a criminal investigation. Of course, rumours are rumours and we aim to provide a megahub for all the verified information available to the public in regards to this case.
So the first and most important piece of information, Weedmaps was summoned with a ‘Grand Jury Subpoena’ in September 2019 to appear before a federal criminal grand jury in Sacramento. As of March 2020, federal prosecutors were still active on the case and had escalated their investigation and requests for information. The exact purpose and reasoning for the summons and all information involving grand juries is kept strictly confidential. This is in order to preserve the defending company’s reputation until an official statement has been made by federal prosecutors.
However, there is some key information publicly available that gives some clues as to what Weedmaps is currently dealing with. The Sacramento-based Grand Jury had requested a full audit and probe into the company, requesting literally every single business document the company has ever produced since it opened in 2008. This includes all employee names, addresses, telephone numbers, full audits of all managers and executives along with all human resource data. In terms of specific documents, in particular requested all calenders, notes, contact lists, records and all finance and tax information for Weedmaps as well as all outside business agreements. This includes all sales, contracts, banking and vendor contact information since they opened in 2008. The Grand Jury named 25 Weedmaps executives, 9 third-party investment corporations, and 30 smaller associate companies.
Cannabis attourneys, lawmakers, and former federal investigators have highlighted that a full top-to-bottom audit is not at all a normal request or routine probe. In fact, this is a massive undertaking that is only done for a higher-stake criminal investigation. Experts have theorized that Weedmaps history and current business practice of unapologetically advertising unlicensed dispensaries and services is likely one of the reasons they’re under investigation. Through these blackmarket vendors, Weedmaps is likely receiving backlash for their part in the mass hospitalizations that involved inhaling cyanide from vaping THC oils containing Vitamin E Acetate.
On top of the Vaporizer Outbreak, the unlicensed blackmarket vendors have become a huge issue with successful legalization rollouts. A prominent cannabis criminal defense attourney based in California described Weedmaps as “sabotaging the entire system… It’s part of the reason why the regulated market is unworkable for honest operators who play by the rules.”
Weedmaps has a lengthy history with the courts and governing regulatory bodies for cannabis. In 2018, the executives were served with a cease and desist letter from the California Bureau of Cannabis Control, which they entirely ignored as the continued cooperation with the blackmarket allowed them the cashflow and tools needed to circumvent as much government regulation as they could.
The other businesses that are associated with Weedmaps and also named in the grand jury subpoena also have their own criminal histories. Both CannaCraft and Terra Tech are named in Weedmaps’ subpoena, their previous run-in with federal investigators involved charges of bribery and manufacturing products without a license. Weedmap’s subpoena had a particular interest in documents involving investors, public officials and representations, and banks.
So what does all of this add up to? Weedmap’s subpoena to appear before a grand jury is strongly suspected to be related to an FBI corruption case investigating the bribery and manipulation of politicians through kickbacks, extortion or money laundering offers. If federal investigators are able to find the information they need to press chargers, Weedmaps will have to shutdown its services. How long that may take is hard to say, as the investigators have nearly 12 years of documents to sort through before they reach their conclusion. What we do know is that the regulators and powers in charge have a particular interest in changing Weedmaps’ effect on the market, whether it be through shutting it down or stripping it’s services is something to wonder.