California marijuana advertising giant Weedmaps announced Wednesday it laid off 25% of its workforce, blaming the slow rollout of recreational MJ markets in California and Massachusetts and a dwindling pool of outside funding.

The job cuts – disclosed by Weedmaps CEO Chris Beals via Twitter – amount to more than 100 people. They affect the company’s news division and other departments.

A source familiar with Weedmaps’ internal decisionmaking said more than 50% of the company’s remaining workforce will be focused on engineering, product development and design to support its software and compliance portfolios.

pledged to remove ads from its online platform for unlicensed marijuana shops and delivery services, particularly those in California. The move is expected to result in the loss of revenue for Weedmaps.

But the source close to the company, who requested anonymity, said the job cuts were not in response to that situation.

In his written online statement, Beals said the Irvine-based company made the layoffs for the following reasons:

New cannabis markets such as Massachusetts have been slow to develop.

75% of California’s cities and counties are not allowing cannabis retail sales.

Tech and cannabis capital markets “have experienced tightening” this year, limiting the ability to leverage outside capital to fuel growth.

Conversely, Beals also wrote that the company has increased its consumer base by more than 50% year-to-date and successfully launched other offerings across multiple markets.

“This rapid growth requires us to be prudent in how we deploy capital and ensure that we can nimbly attack new markets and new software opportunities as they arise,” Beals wrote.

According to the source close to Weedmaps, most of the company’s revenue growth comes from outside California. And most of the company’s fastest-growing sources of revenue were limited to licensed operators.

Today was my toughest day during my tenure as CEO. A note on the departures we had today from the Weedmaps family. We will continue to grow and drive forward. https://t.co/5Gamx9vuFP — Chris Beals (@chrislbeals) October 16, 2019

A company spokesperson told Marijuana Business Daily in September that Weedmaps, which also advertises for legal cannabis companies, has more than 500 employees at its disposal.

The company’s practice of advertising for unlicensed cannabis companies has been linked to the vaping health scare, which has sickened more than 1,000 and killed over two dozen people.

Many of those who have fallen ill from vaping have purchased vape products from the illicit market, according to the Centers for Disease Control and Prevention.

Weedmaps came under fire last month when California Gov. Gavin Newsom made clear during a news conference that the company will be held to account if it doesn’t follow through on its pledge to drop all unlicensed retailers from its site by the end of the year.

The issue dates to last year.

In February 2018, Weedmaps was targeted with a cease-and-desist letter by the California Bureau of Cannabis Control (BCC) and refused to comply, citing legal protection from the federal Communications Decency Act and arguing the BCC had no jurisdiction over the company because it didn’t hold a state cannabis license.

Bart Schaneman can be reached at [email protected]