This week, the Dow Jones Industrial Average has been on a tear, but it's nothing compared to the recent highs achieved by an obscure stock known as General Cannabis (ticker symbol: CANA). Since word leaked out in September that the company was acquiring the popular Yelp-for-pot site WeedMaps.com, the value of its shares has skyrocketed 300 percent. Last week General Cannabis officially finalized the purchase, making WeedMaps the latest and most brazen marijuana business to go public.
Founded in 2008 by a University of California computer science graduate, Justin Hartfield, WeedMaps allows users to search for medical marijuana dispensaries in their area, compare prices, and post reviews. Its 50,000 paying users in September grossed the site $400,000, according to David Downs of the East Bay Express, who explains:
Most people use the site for free, but like Craigslist or Yelp, Weedmaps charges dispensary owners for prime placement, review rebuttals, and advertising. User payments became so torrential, credit card processors assumed fraud. Weedmaps had to create its own merchant-processing account to deal with payments, and spin-off "Cannapay" now does billing for two-dozen other businesses. It may become a credit union. Weedmaps' free iPhone app also gets 700 to 800 new downloads a day and has been downloaded over a half a million times.
Beyond its popularity, though, what makes WeedMaps controversial are the other websites run by the company, some of which can't claim to be solely for semi-legal medical marijuana users. And that doesn't make everyone in the medical pot world happy, Downs notes:
Some perceive Hartfield's young, bold approach as a threat to hard-won patient rights. Weedmaps sites like weedporn.com and weedorskin.com don't exactly legitimize medical use. Arizona medical marijuana campaign manager Andrew Myers notes that national support for medical marijuana has peaked and begun to erode, even as full legalization's supporters grow.
As the marijuana industry gradually goes mainstream, you can expect to see a lot more of these types of conflicts. In the next issue of the print magazine I profile the founders of WeGrow, a vertically-integrated pot company that aims to be the nation's first "marijuana superstore." They too plan to go public, and if and when that happens, it will make WeedMaps look positively tame.