LANSING -- Michigan officials hope Weedmaps, a popular advertising website for unlicensed marijuana businesses, stays true to its word and helps curb the proliferating marijuana black market.

Marijuana Regulatory Agency Director Andrew Brisbo said he’s been pressing Weedmaps to end advertising on its site by unlicensed operations that are in some ways indistinguishable from Michigan’s licensed marijuana businesses.

“So they have given me assurances that as of (Jan. 1) they’re no longer going to engage in contracts with businesses without validating they hold a state-level license,” Brisbo said during his presentation at an industry networking even in Detroit on Dec. 18. "So at this point, I’m taking them at their word ... but we’ve seen a dramatic shift in their approach to that and their willingness to be cooperative.

“I think that they see ultimately that their bread and butter is the regulated market as well, as the regulated market starts to overtake the illicit market."

A quick scan of businesses advertising on Weedmaps reveals many are not state-licensed.

When asked by email if it is the intent of Weedmaps to impose a licensing requirement for advertisers beginning Jan. 1, spokesman Travis Rexroad said, “That is, indeed, correct.” His response included the link to an August announcement that “U.S. retail advertisers” would, by late 2019, be required to include a state license number in their listings.

The black market is a daunting competitor to Michigan’s 300-plus and growing medical and recreational marijuana businesses that have to make their way through expensive and complicated bureaucratic hoops before ever making a dollar in the industry.

Not including insurance, inspections and the taxes, a recreational retail license in Michigan costs $25,000 for the first year, in addition to a $6,000 state application fee. Local municipalities are allowed to charge an additional $5,000 for license applications.

Furthermore, licensed marijuana products must be tested multiple times for contaminates and labelled for tracking from seed to sale on store shelves, which along with the economic impact of supply limitations in the regulated market, significantly increases costs.

Stuart Carter, the owner of Utopia Gardens, a medical marijuana dispensary in Detroit, has been a staunch opponent of Weedmaps for more than a year.

He said he’s watched the number of unlicensed dispensaries or delivery services on the site increase from about 90 to 200 in the last year.

“I have specifically said in the past, and it stands true today, that Weedmaps is the gateway to the black market in Michigan,” Carter said. “They’re promoting organized crime because there are some very large organizations operating illegally in Michigan ... and Weedmaps allows them to advertise without a state license.”

Carter said he personally reached out to Weedmaps and was told they intend to implement a license requirement for advertisements after Jan. 1.

“I’m skeptical," Carter said, “but Mr. Brisbo says he think’s they’re going to, so everything I’ve heard points to that Weedmaps may become a good citizen.”

Brisbo says he’s also met with the Governor’s Office, Attorney General’s Office and state police regarding increased enforcement on black market marijuana businesses.

“We have been part of discussions with the Marijuana Regulatory Agency about unlicensed companies in the marijuana black market, but there is nothing further to share in regards to this at this point," state police spokeswoman Shannon Banner said.

Attorney General’s Office spokeswoman Kelly Rossman-McKinney said what the enforcement “will look like is still being discussed.”

“The department plans to treat the illegal production and sale of marijuana the same as we do where alcohol and tobacco are illegally manufactured and distributed by unlicensed entities,” she said.

State police from the agency’s Marijuana and Tobacco Investigation Section raided two unlicensed marijuana businesses police say were operating in Genesee County on Dec. 10.

Liberty Meds Lounge, 3100 N. Center Road and The Rec Center, 8033 N. Dort Highway, both in Genesee Township, are accused of selling unlicensed medical and recreational marijuana.

“Nobody has been arrested in regards to these search warrants to date.,” state police Detective Sgt. Robert Smith said Dec. 17. “Although evidence of illegal activity was discovered, we will not be disclosing what was seized during the execution of the search warrants."

-- Gus Burns is the marijuana beat reporter for MLive. Contact him with questions, tips or comments at fburns@mlive.com or follow him on Twitter, @GusBurns. Read more from MLive about medical and recreational marijuana.

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