It is Friday night and I am standing on the doorstep of my San Francisco apartment looking down in disbelief at the neatly packaged, vacuum-sealed bag of green-grey marijuana buds in my hands which has just been delivered by a friendly and courteous driver, 16 minutes after it was ordered online. An eighth of an ounce (3.5g) of Purple Platinum cost $25 after a $20 promotional discount. The payment was cash only. The label lists the strain – apparently a classic of the state’s marijuana-growing region – along with the retail dispensary that supplied it. Everything is legal.
Let me explain. In California, medical marijuana is allowed, and my husband ordered the drug through the delivery service Eaze. It was, well, easy. Earlier that day, for a separate fee of $25, the site connected him to a marijuana doctor who, over a video chat, was happy to give him a good-for-a-year medical recommendation for his occasional migraines (the drug, it seems, can be used either as acute or prophylactic therapy).
Though the doctor was not available immediately – the service is in high demand – when it did happen the consultation took five minutes. After uploading the recommendation, it was a case of browsing Eaze’s site and selecting a strain from the 18 available (which include varieties such as Funk You Up, Green Crack and Headstash Cookies). Delivery time averages 15 minutes. There was no physical visit to either a doctor or a dispensary, which has been the process for Californians in the past.
Eaze started in San Francisco in July 2014 but has since spread to more than 80 cities in California, mostly in the Bay Area. The separate service that connects patients with marijuana doctors over video was added this summer. The idea is that of Keith McCarty, an early employee of business social network Yammer, sold to Microsoft in 2012 for $1.2bn.
Looking around for how to catch the next wave of technology, McCarty decided to focus on consumer delivery on demand. Since the success of ride services Uber and Lyft, startups have sprung up in San Francisco to deliver everything from fancy restaurant meals to clean clothes. Eaze quickly raised $1.5m in funding and by June 2015 an additional $11m, the lion’s share of which came from top-tier Silicon Valley investment firm DCM Ventures but which also reportedly attracted the investment firm of rapper and marijuana aficionado Snoop Dogg.
‘Cannabis hasn’t really had a lot of technology, and now it is coming’
“Eaze is like the Uber of marijuana,” says McCarty. Drivers employed by a local medical marijuana dispensary cruise the streets with a set inventory in the back. When a patient selects a product online, Eaze algorithms alert the closest driver and ask them to make the delivery.
The company and its investors are at the vanguard of a new trend in Silicon Valley: bringing software technology and business models to bear in the marijuana industry. “It is called the green rush. It is already a growing industry and we are just getting started,” says McCarty.
“Cannabis hasn’t really had a lot of technology, and now it is coming,” says Eddie Miller, co-founder of New York-based eCann Media, which is hosting a series of summits across the US and overseas, including London, for those interested in investing in cannabis technology companies.
Splashy investments have hitherto been rare in the marijuana industry – the drug remains illegal at the federal level. There is also a stigma attached to the industry which is seen as rife with people who overindulge, adds McCarty (he says he doesn’t use it). But as more and more states open up to medical or recreational marijuana or both (24 so far, including Washington DC) and the move to legalise it for recreational use in California gathers steam, the business opportunities are obvious.
The market is likely to reach $3.1bn (£2bn) this year in wholesale and retail cannabis legal sales, estimates the industry publication the Marijuana Business Factbook. Aiding things too is the so-called Cole Memo, which makes clear that the US federal government will take a hands-off approach to enforcement as long as state laws are complied with. (A bill to protect states’ medical marijuana laws from federal interference is also making its way through congress, recently clearing the US House of Representatives).
California’s voters are poised to consider legalising cannabis for recreational use in 2016 funded by the likes of tech billionaire and former Facebook president Sean Parker. If the state embraces it, it will not have been the first to do so. Incentivised by tax revenues, Colorado, Washington, Oregon, Alaska and DC have already legalised it for recreational use. But California has the largest population of any US state, more than double the combined population of the states that have already fully legalised it. California is the world’s largest cannabis market, based on legal medicinal use alone. Particularly popular with investors are the so-called ancillary companies, of which Eaze is an example. Not growing or selling the product themselves, they represent far less legally risky business opportunities (remember that the dispensary-employed driver – not Eaze – collects the customer’s cash, even if Eaze gets a cut later).
Source: The Guardian | Zoë Corbyn