Although marijuana has been legal in California for nearly two years, black market weed is still a booming business in the state.

Illegal sellers outnumber legal and regulated businesses almost 3-to-1, according to a startling analysis of California cannabis sellers released this month. Some critics blame the website Weedmaps for letting thousands of rogue stores advertise.

But cannabis regulators are cracking down. This week, they put publications, including Weedmaps, that advertise unlicensed marijuana businesses on notice that doing so is against state law.

"Failure to comply with the requirements for advertising may lead to significant financial penalties," the Bureau of Cannabis Control said in an email to the industry Tuesday.

The sellers analysis, which was completed by an association of legal marijuana businesses in the state, punctuates a tough year in an industry that launched with great promise in 2018 but soon faced heavy challenges including, a lockout of legit sellers in most of the state's cities, enforcement challenges and high retail taxes.

Critics say those hurdles have only emboldened an expanding black market.

The United Cannabis Business Association, a statewide group of legal marijuana businesses, found that about 2,835 illicit sellers, including storefronts and delivery services, are operating statewide. That's more than three times as many illegal sellers as legal ones — 873. The group unveiled the numbers earlier this month in an open letter to Gov. Gavin Newsom and state marijuana czar Lori Ajax.

"We’re the only state to go recreational and see a year-over-year reduction in legal sales," UCBA president Jerred Kiloh said.

When Proposition 64 made buying and holding cannabis legal for those older than 21, many in the industry expected a green rush; it opened sellers to perhaps the world's largest legal marijuana market.

But as the first licensed stores started welcoming customers in 2018, rogue operators claiming to have permission to sell cannabis were also setting up shop in such places as Los Angeles and San Diego County.

Signs advertising medical marijuana prescriptions outside an evaluation clinic on Venice Beach in Los Angeles on Oct. 9, 2009. Before recreational marijuana sales were approved by California voters in 2016, this was the way many consumers made their way to legal cannabis.Mark Ralston / AFP - Getty Images file

Bay Area cities haven't struggled as much with black market storefronts, and some experts say that's likely a result of plenty of legal stores and diligence from local officials. "The Bay Area has been ahead of the curve on licensing for many years," said San Francisco-based Dale Gieringer, director of California NORML.

"We’ve yelled it from the mountaintop," Kiloh, who owns a licensed shop in Los Angeles, said. "We want better enforcement."

In making the results of its illegal-shop analysis public, the main focus of the UCBA's ire, however, wasn't City Hall or even Sacramento. It was the international website Weedmaps, which lists cannabis sellers in major markets like Los Angeles, regardless of whether they're state-approved.

In 2018, the state sent Weedmaps a cease-and-desist letter because the site allows unlicensed sellers to advertise, which violates California's cannabis regulations that require advertisements to display license numbers. "You are aiding and abetting in violations of state cannabis laws," the letter stated.

The site could be liable for $30,000 a day in fines, under state law.

In July, Weedmaps announced it would phase out ads from illicit shops.

Chris Beals, the website's CEO, said that the rogue advertisers would be gone by the end of year. But for some in the industry, that's not fast enough.

"We don’t want to let Weedmaps dictate when they’re going to stop breaking the law," Kiloh said. "That doesn’t make sense."

Weedmaps, which operates in nine countries and the majority of American states that have legalized some form of cannabis, says it's not the problem when it comes to California's black market.

No other recreational marijuana state has seen the black-market issues California has, site CEO Beals said. The main problem, he says, is there aren't enough legal retail locations to meet the market demand.

Many of the same black-market operators on Weedmaps can also be accessed on Google, Yelp and other platforms, he said: "This is really superficial. The real underlying problem is that there’s insufficient licenses address market demand."

That's an issue even state regulators have recognized: When California voters made recreational marijuana usage legal, they gave cities leeway to outlaw sales or limit them locally as they saw fit.

They have, and wide swaths of the state are dry. Forcing cities to accept cannabis is a long shot in a state known for its strong, not-in-my-backyard politics.

"The bureau would love to be able to license more cannabis retail locations in California," Alex Traverso, spokesman for the Bureau of Cannabis Control, said by email. "Unfortunately, there are a number of factors that prevent us from doing that. It’s not all under our control."

Less than 25 percent of the Golden State's cities allow legal sales, he said.

Gieringer of California NORML said the state's cannabis buyers also must consider that when buying from a legal shop, the price includes state and, often, local taxes that can add up to 25 percent to the cost. "I think the real problem out there is the regulations and the taxes are too expensive," he said.

"It's a sad state of affairs when the prices go up and the array of products goes down when they repeal prohibition," he said. "It's supposed to be the other way around. There are fundamental problems with the way California handles this issue."

On the street, police continue to chase down rogue operators who often undercut price and don't collect taxes.

In Los Angeles, where some observers say more than 1,000 shops operated before licensing was established, police have been scrambling to shut down fly-by-night dispensaries. The city has only 187 licensed shops.

The UCBA analysis found hundreds of illegal stores in L.A., and the Los Angeles Times in May counted 220 illegal stores.

Narcotics Detective Vito Ceccia of the Los Angeles Police Department's Cannabis Support Unit says shutting down rogue storefronts has "always been a whack-a-mole situation."

But he says police have reduced the number of illegal shops to fewer than 175 — less than the number of legal ones for the first time. And the City Council is weighing a measure that would allow authorities to padlock and board up rogue storefronts.

The detective said police use Weedmaps to find illicit business, particularly delivery services that don't always have a boulevard storefront.

"They are a great tool for law enforcement," Ceccia said.

Beto O’Rourke said Thursday that he wants the federal government to provide “Drug War Justice Grants” to people formerly incarcerated for nonviolent marijuana offenses.

The proposed grants, part of O’Rourke’s plan to legalize and regulate marijuana, would be funded by a federal tax on the industry.

The proposal comes as O’Rourke, an early champion of marijuana legalization, seeks to regain his footing in the Democratic presidential primary. Campaigning in California, he met with marijuana advocates in Los Angeles on Tuesday and planned to hold a similar meeting in Oakland on Thursday.

If elected, O’Rourke pledged to use clemency power to release people now serving sentences for marijuana possession, and he called for expunging the records of those convicted of possession.

He also proposed removing cannabis-related charges as a grounds for deporting people or denying them citizenship.

More than a dozen candidates in the Democratic Party’s sprawling primary field support legalizing marijuana, reflecting a significant shift in party politics in recent years.

But the issue has long been a cause of O’Rourke’s. As an El Paso councilman, he pressed in 2009 for a resolution encouraging the federal government to undertake an “open, honest, national dialogue on ending the prohibition of narcotics,” arguing that legalizing marijuana could stop drug trafficking at the U.S.-Mexico border. He co-wrote a book, "Dealing Death and Drugs: The Big Business of Dope in the U.S. and Mexico," in 2011.

In his proposal Thursday, O’Rourke’s campaign said proposed "justice" grants would be funded entirely by a tax on the marijuana industry and would go to former state and federal inmates for a period based on time served.

O’Rourke’s campaign said a federal tax on the industry would also fund treatment programs, re-entry services and programs in communities disproportionately affected by marijuana arrests. He also proposed tying federal criminal justice funding to a requirement that states and local governments waive licensing fees for marijuana-related businesses for low-income people who have been convicted of marijuana offenses.

“We need to not only end the prohibition on marijuana, but also repair the damage done to the communities of color disproportionately locked up in our criminal justice system or locked out of opportunity because of the War on Drugs,” O’Rourke said in a prepared statement. “These inequalities have compounded for decades, as predominantly white communities have been given the vast majority of lucrative business opportunities, while communities of color still face over-policing and criminalization. It’s our responsibility to begin to remedy the injustices of the past and help the people and communities most impacted by this misguided war.”

O’Rourke's campaign said he would seek to regulate marijuana similarly to how alcohol is regulated, including limiting sales to adults and conducting advertising focused on deterring use by children and driving under the influence.

O'Rourke proposed limiting smoking of marijuana to “private residences and nonpublic spaces” and keeping marijuana-related businesses apart from “schools, daycares, churches and other incompatible land uses.”

Colombia could export $6 billion a year in medicinal cannabis products, making marijuana its third-largest source of foreign exchange, the government said on Thursday, as investors called for simpler regulations for marijuana producers.

Colombian law already regulates the possession, production, distribution, sale and export of seeds and other marijuana products like oils and creams, but investors say the export approval process is tortuous.

“It’s possible to be a very important player at an international level in terms of exports. The estimates show we could effectively be at the level of $6 billion annually,” commerce vice minister Saul Pineda told attendees at the country’s first annual cannabis conference.

Colombia has so far only licensed seed-producing by businesses because of complex compliance standards for everything from sanitation to security, in a country still famous for being a top illegal narcotics producer.

“More forceful action in regulatory terms is needed so we don’t lose the momentum that we have been growing with,” said Gustavo Escobar, head of innovation at Colombian-Canadian joint venture Clever Leaves.

“We’re lacking some adjustments that would allow us to attend to markets as quickly as possible, before other countries get ahead of us,” he added.

Colombia’s hearty sunlight and equatorial climate could make it a major producer of medicinal cannabis, whose cultivation in the country has been backed by the United Nations International Narcotics Control Board.