With new laws regulating the medical marijuana industry in Washington set to pass on Friday, pot entrepreneurs are re-thinking their business plans.
Canary, a Seattle-based startup that launched late last year and billed itself as the “Uber for pot,” shut down today.
Canary co-founder Josiah Tullis said that the new regulations will effectively prohibit the delivery of medical marijuana in Washington, which was the backbone of Canary’s revenue stream. Meanwhile, I-502, which governs the use of recreational marijuana in Washington, does not allow for delivery of pot.
“We could see it coming,” said Tullis, a junior at the University of Washington. “We were already re-examining which direction to take our product.”
That new direction comes in the form of Dave, another new Seattle startup that came out of stealth mode this week and has an app that facilitates in-store pickups at legal weed shops in Washington and Colorado.
Canary, which had delivered more than 400 orders in the past three months prior to ceasing operations, is merging with Dave as it looks to focus on the recreational market.
Dave, meanwhile, had also planned to build an app that enabled marijuana delivery. But co-founder David Hansen said the company decided to change course as SB 5052 made it through the Washington legislature.
Now, Dave offers an app that helps users find recreational weed shops and submit orders for pick-up at stores in both Washington and Colorado. Hansen said his five-person team was inspired by the new Starbucks mobile order-ahead feature that lets people order coffee from their phone and pick it up inside the store, without waiting in line.
“There are sometimes lines out the door at these stores,” Hansen said. “Ordering ahead is smart and Dave can help with that.”
Hansen said that the app is also for people that may feel intimidated inside a weed shop or don’t know much about which strain to purchase and would like to make decisions at home before arriving at the store.
“If you haven’t smoked since college, Dave can help,” he said. “If you are in town visiting Seattle and want to know where to find cannabis, Dave can help with that, too.”
Tullis added that Dave, which will make money by charging stores to be listed in the app, is somewhat similar to Weed Maps or Seattle-based Leafly, whose investment firm Privateer Holdings just raised a $75 million round. There is one key difference, though.
“They have a big medical focus,” Tullis said. “We want to move away from that.”
There’s been an increase in attention on the marijuana-related tech startups in the past few months, particularly around delivery. For example, Eaze, which delivers medical marijuana in California much like Canary was doing in Washington, raised a $10 million funding round two weeks ago.
But for now, Dave is not focused on moving marijuana from point A to point B.
“Those guys are going for the last mile play, to be the Fed Ex or UPS of all this,” Hansen noted. “We aren’t really doing that.”
However, Tullis said that if laws change to enable delivery, he’s looking forward to incorporating something like Canary into the Dave app.
“We had really good run with it,” Tullis said of Canary. “If it wasn’t for changing legislation, who knows where it would have gone. But we’re excited to work on this new product.”
