Trending: Vista Equity Partners to pay $1.9 billion in private-equity deal for Apptio

Eaze, a Bay Area-based startup, delivers medical marijuana to patients across California.
Eaze, a Bay Area-based startup, delivers medical marijuana to patients across California.

Mayor Ed Murray wants to roll out a pilot program in Seattle for legal marijuana delivery, but local pot shop owners aren’t too thrilled with the proposed plan.

The mayor voiced his support for a new bill introduced earlier this month in the state legislature that would create a two-year pilot program allowing five recreational shops in Seattle to deliver weed directly to a customer’s doorstep.

Ed Murray at Startupday 2015
Mayor Ed Murray at GeekWire Startup Day 2015.

When the state of Washington passed its recreational marijuana laws in 2012, there were no regulations established for a delivery framework. But with existing illegal pot delivery services still operating in the Seattle region and not paying tax, officials say that they are “undercutting Washington state’s voter-approved legal marijuana market.”

So, the mayor and fellow politicians want to eliminate these illegal delivery services while also rolling out a regulated delivery program for legal marijuana — one that “will better protect customers, patients and business owners, while strengthening the legal marijuana industry,” according to the mayor’s statement on Jan. 19.

House Bill 2368 would limit marijuana delivery to private residences and to Washington state residents over the age of 21. Recreational pot shop employees would also be required to undergo training on proper verification of IDs.

However, recreational marijuana shop owners are concerned with the proposed bill. Logan Bowers, owner of Hashtag Recreational Cannabis in Fremont, told GeekWire that he’s worried about customer confusion in regard to the existing illegal delivery services, as well as the safety of employees that would be making the deliveries themselves.

Logan Bowers.
Logan Bowers.

He also noted that legal recreational shops don’t yet have access to credit card processing software and said it wouldn’t be smart to have employees driving around town delivering marijuana with huge wads of cash.

“The market is not quite ready for it,” Bowers said, adding that “I don’t think the plan as written today is safe or good for customers.”

KC Franks, owner of Stash Pot Shop in Ballard, shared similar concerns with employee safety and lack of credit card processing technology. He said regulators are “putting the cart before the horse” in a recreational marijuana industry that is still working out a bevy of rules and laws unrelated to delivery.

“It just doesn’t make any sense to add this additional layer of liability and difficulty to this industry when we still don’t have our feet under us,” Franks told GeekWire.

KC Franks.
KC Franks.

Franks noted that he isn’t opposed to legal marijuana delivery and said he would love utilizing something like Amazon’s delivery drones to get his product to people more efficiently.

“Do I believe legal marijuana delivery services will eventually be here some day in the future? Absolutely,” Franks said. “But that day will happen when I have a way to know exactly where my employee is going, that they are safe, and that they have no money to carry because everything is electronic.”

However, others are more optimistic. Tara Wells, owner of Ganja Goddess in Sodo, said she welcomes the pilot program and said it keeps Washington “on the cutting edge of technology.”

“People every day order goods via phone and online delivered to their homes,” she said. “It speaks to that changing part of our economy. We embrace this and look forward to being part of delivering cannabis to customers in Seattle.”

Seattle ranks second on Zillow's list of hottest housing markets in 2016. (Kurt Schlosser, GeekWire)
Photo by Kurt Schlosser, GeekWire.

Wells also said the legal delivery framework is “a great way to eliminate the black market that currently exists in legal cannabis in the state.”

“Right now, there are hundreds of illegal delivery services,” she said. “By licensing existing retailers of cannabis to deliver, that market will be eliminated.”

For the city, the focus right now is to first get rid of the illegal delivery services as potential laws regulating legal deliveries make their way through the state legislature.

“There is a large illegal delivery market and it’s a big problem,” said Deputy City Attorney John Schochet. “As the city, we support legal marijuana, but we want adults to use the legal system to get their marijuana.”

The safety concerns shared by Bowers and Franks are certainly top of mind for city officials, with Schochet calling it one of the top priorities for the pilot program. He also noted that Washington allows licensed liquor delivery and it “makes sense to give this a try with marijuana as part of the legal system,” he said. Companies like Drizly and Amazon offer ways to get booze to your door in one hour or less.

Even so, Franks noted that the alcohol industry is “old as time.”

Eaze CEO Keith McCarty.
Eaze CEO Keith McCarty.

“My store has been open for six months,” the Stash Pot Shop owner said. “I just think it’s premature to do this now and I’m not exactly sure what the motivation is behind it.”

One company the city could examine when establishing their delivery regulations is Eaze, the Bay Area-based startup that has raised $12.5 million and delivers medical marijuana to more than 100 cities throughout California.

Eaze co-founder and CEO Keith McCarty told GeekWire that there is certainly demand for marijuana delivery.

“The reason people are moving toward an Eaze-type model is because it’s the easiest, quickest, and most professional way to get access to cannabis for qualified patients in about 20 minutes with click of a button,” he said. 

McCarty said that delivering recreational weed would actually be “easier” than medical, given the extra regulations and verification needed from medical marijuana patients. But given his company’s experience working with regulators, he knows that legal deliveries still need certain restrictions.

The Eaze app.
The Eaze app.

“We understand what regulators need to see around trust and safety, and how delivery can be done in a professional and safe manner,” McCarty said.

The CEO also added that the wealth of data his company collects from its delivery transactions is “proving to be very welcoming for regulators.” That is perhaps something the officials in Seattle want to see during the two-year pilot program before opening up the delivery market to all 19 legal shops in the city.

There are other companies similar to Eaze like Seattle-based Canary that are building technology to help dispensaries deliver marijuana. But as it stands now, the existing legislation would not allow a third-party company like Eaze to be apart of the pilot program.

Of course, the proposed pilot program needs to make it through the state legislature in March before any type of recreational deliveries can happen.

“If they pass it, we’ll start working on regulations to get this up and running as soon as possible,” Schochet said.

Like what you're reading? Subscribe to GeekWire's free newsletters to catch every headline

Comments

Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.