Irvine-based Weedmaps, “the most widely used medical and recreational marijuana dispensary locator in the industry,” recently said it would reduce its headcount by 25%, citing slower-than-expected industry growth.
The cuts are listed under Weedmap’s parent Ghost Management Group LLC in a WARN report filed on Oct. 25, which disclosed the severance of 97 employees.
“These colleagues worked tirelessly to ensure patients and consumers could safely and conveniently access cannabis,” Chief Executive Chris Beals said in a website posting about the dismissed employees.
Beals made his announcement about seven months after taking the top spot at the company, sometimes described as the “Yelp” of the cannabis industry.
The company had been giving signs that it was growing.
As recently as July, the company employed more than 400 and its website had 56 job openings, including 50 at its Irvine headquarters in the Spectrum area of the city; it occupies about half of a 45,000-square-foot building at Irvine Co.’s Discovery Park office complex.
It also added a large office spot in Los Angeles’ Arts District earlier in the summer.
Hurdles
Yet, Beals wrote in his Oct. 16 post that the speed of new market openings has slowed in the past year and markets that have opened such as Massachusetts aren’t issuing enough licenses for a functioning legal market.
“In our own home state of California, three years after Proposition 64 legalized recreational use, it is disheartening to see 75% of cities and counties not allow cannabis retail sales and California lag behind other legalized states,” he said.
“Additionally, both the overall tech and cannabis capital markets have experienced tightening through 2019 that has limited the ability to predictably leverage outside capital to fuel growth during rapid expansion periods.”
The company itself has been mired in controversy with state regulators because it’s accepted advertising from marijuana stores operating without a license.
Despite the slowing industry, Beals’ post claimed, “This year represents one of the fastest years of growth ever for Weedmaps by almost any measure,” citing a 50% increase in its consumer base. It doesn’t disclose revenue.
He sees the industry increasing throughout 2020, led by legalization in Illinois this coming January.
“For this reason, as well as our pace of software innovation, I am incredibly bullish on the future of Weedmaps and the opportunity to support these new legal cannabis markets,” he said.
