VC firms of Kevin Durant and Snoop Dogg back Dutchie, a new cannabis delivery service
Ross Lipson, the chief executive officer and co-founder of the on-demand marijuana and cannabis delivery service, Dutchie, had thought he was done with the online delivery business.
Instead, he’s launched a new delivery service that has just raised $3 million from Casa Verde Capital, the $45 million venture firm founded by hip hop impresario Snoop Dogg, and Kevin Durant’s Durant Company — among others — to take advantage of the growing demand for marijuana delivery.
It had been only five years since Lipson sold a food delivery business he spent a decade building when the inspiration for Dutchie came to him. And the idea was too compelling to shake.
Lipson was living in Bend, Ore., where he’d retired after selling his online food delivery business GrubCanada to JustEat, the European tech-enabled delivery giant, back in 2012.
Then, in 2015, after Oregon legalized recreational use of marijuana, Lipson began wondering if it wasn’t time to revisit the whole delivery space again.
For him, the conundrum for consumers looking to buy cannabis products was similar to the dilemma in-home diners faced when choosing what to eat. In the modern weed world (at least in places where marijuana is legal), consumers are so spoiled for choice they often go with a default option.
Before online delivery, ordering food meant turning to the neighborhood spot for everything from American to Ethiopian, Italian, Jamaican, Chinese, Indian, Thai, or Tibetan food. But with online delivery services, a whole city’s worth of restaurant options opened up to consumers (as long as they were in your delivery area).
The same, Lipson figured, was true of marijuana.
“We’re creating a tool that helps the user and consumer navigate the delivery space,” he said. “We’re educating the consumer to that buying experiences…. If you don’t have that online ordering tool in front of you you’re forced to choose a dispensary and take the information that that ‘budtender’ gives you, which is their personal preference.”
Right now, marijuana delivery is something of a land grab. In Los Angeles alone, services like Nugg, Ganjarunner, Kushfly, Eaze, HERB, Westside Organic, and Cannabis Express, all pitch delivery services for marijuana or cannabis infused products, oils and vapes to willing consumers.
Eaze, the biggest startup in the online delivery space, has raised at least $37 million to tackle the growing market for legal cannabis delivery since its launch in 2014.
Lipson, however, has seen this all before with food. He started Dutchie in 2017 (and yes, it is named after the song) in 2017 from Bend and has been slowly and steadily growing the business. The company signed on 50 dispensaries in Oregon to help prove out the product and just raised $3 million in a seed round from Casa Verde Capital, The Durant Company, Sinai Ventures and other angel investors.
The company currently operates in Oregon, Washington, and Michigan and is launching in Colorado, Nevada and California this month. It currently works with 100 dispensaries and has seen $2.5 million in gross merchandise volume in its first year of operations alone.
To further boost its expansion efforts, the company also signed an agreement with Canopy Rivers (the newly spun off investment and operating arm of $10 billion dollar Canadian cannabis company, Canopy Growth) to operate internationally in Canada. Asked why Lipson didn’t just try to float the business on the Toronto Stock Exchange to take advantage of the exuberance investors have for all things cannabis, the chief executive said he wanted to be more measured in his approach.
“There’s a lot of hype and speculation around the cannabis space especially in the public markets,” Lipson said. “It’s not a traditional way to go about a business of this size. We’re extremely excited and eager to partner with the investors that we did.”
With only 14 employees — many of whom work remotely — Lipson is hoping to roll out aggressively in the next few months across all states in which medical marijuana is legal as well and into Canada as well.
“We’re priding ourselves on the concept of scalability,” says Lipson. Who’s relying on his co-founder, and brother, Zach, to help him execute. “That’s the underlying mantra of our strategy.”
That mantra of scalability was apparently what attracted Casa Verde, which took only two months to decide to lead the investment round into Lipson’s new venture. “I started talking to them four months ago,” Lipson said. “A month or two into it, they did the deal and took the lead and we’ve just been filling out the round with strategics.”
Source: Tech Crunch