Marijuana Delivery ‘Canary” Startups Are Ready. The U.S. Government Is Not.
July 10, 2014
Canary, a new startup that offers on-demand marijuana delivery, recently launched with the tagline “Prohibition is over.” The startup’s webpage advertises 24/7 availability for pot in Colorado and Washington, where state legislatures recently legalized the sale of recreational marijuana. The site teases a sleek, simple app for ordering, available for both iPhone and Android devices; knowledgeable couriers will work with local dispensaries to bring the goods to your door with three the click of three buttons, Canary promises, making acquiring pot as easy as ordering takeout Chinese food.
There’s just one problem: It’s totally illegal.
Though the prohibition on selling recreational marijuana in Colorado and Washington may be over, the prohibition on delivering it is not. Both states have laws on the books explicitly banning the delivery of weed, wary of losing track of what is already strange and new territory.
That’s harsh news for Canary co-founders Josiah Tullis and Megh Vakharia, two University of Washington undergrads who have been forced to cut back on their grand pot delivery schemes due to the government strictures.
“Our original vision was to have this in its greatest form and have a recreational on-demand marijuana delivery service,” Tullis told Yahoo Tech. “But ultimately we’ve decided it would be better to start with a medical marijuana service in Seattle, and then eventually we’ll begin to scale [up] and look at what we can do recreationally.”
In what is a sign of Canary’s attitude — and perhaps, too, the national mood — toward these prohibitions on pot delivery, the Canary website looks forward to “a national Canary launch as soon as the government gets on board with legalization.”
And Canary is not the only startup banking on shifting attitudes and regulations on marijuana. Dispensed2U, an Indiegogo campaign for a “mobile marijuana delivery app,” is seeking funds to build out a similar service. Green Labs, a Denver-based co-working space, was founded this year to “bring together a community of leading cannabis startups” in the area. At a recent meeting for Seattle-based marijuana startups, attendees included The Happy Crate, which sends people a box of goodies every two months with pot-related recipes and suggestions for things to do and books to read while stoned, and LiveLabels, a company that helps predict exactly how one might feel based on the type of strain she smokes.
All of these companies are part of a growing club of trailblazing startups who have chosen to act swiftly to capitalize on a market and figure out the legal details as they go. The car-service app Uber, for example, which lets passengers order rides from their smartphones, has been the subject of court cases in Boston and London, and has been banned by regulators in Austin and Miami. The room-sharing service Airbnb is currently battling regulators in New York City. Fresher startups like Glamsquad, which sends hair and makeup stylists directly to people’s homes, is shirking the need for an actual salon permit and hoping for the best. And, of course, there’s Minibar, which delivers booze to your door in New York City, but has been known not to card.
“People want this service,” a hopeful Dispensed2U CEO and co-founder Chris Tim Martin told Yahoo Tech. “And with the constant progression of marijuana legalization, we think delivery laws will be in our favor.”
It’s not just government regulation that’s holding up these pot upstarts. Both Canary and Dispensed2U, for instance, can deal only in cash, as many big banks balk at doing business with marijuana-associated businesses. This means that neither company will be able to provide a quick credit card payment option through its app or website.
Cy Scott, the co-founder of a pot-strain discovery app called Leafly, says his business and employees have most often encountered banking issues because of the content of their business. Payments have been approved and then dropped. And some members of his sales staff lost their Chase bank accounts after they were flagged as being part of a business relating to weed.
“National banks are still hesitant to support the industry for fear that the industry is still federally illegal,” he told Yahoo Tech. “We all kind of have to deal with a bit of hardship there.”
Nevertheless, he has hopes that local banks will rise to the challenge
“I think at the local level we’ll see banks that support the industry,” he said. “As this experiment goes on, Colorado has been pretty successful. They’re looking at $150 million in tax revenue. Maybe as the experiment proves itself, it’ll be improved even more.”
These entrepreneurs are counting on the rising tide of public support in favor of marijuana. Scott notes that 20 states have legalized medical marijuana, in addition to the two that have legalized recreational pot. A 2013 Gallup poll indicated that 58 percent of Americans were in favor of legalizing marijuana.
“Once public opinion reaches 60 percent, it’s going to be something where it would be politically untenable to be against marijuana legalization,” Justin Hartfield, founder of a cannabis community website called Weedmaps, told Yahoo Tech.
On top of banking issues, Hartfield, who is the treasurer for The National Organization for the Reform of Marijuana Laws, a prominent lobbying group, has had difficulty dealing with Apple’s iTunes Store client department. He created a game similar to the popular Fruit Ninja app that involved picking the leaves off of pot plants. Apple told him it would never make it into the iTunes Store, which is consistent with the company’s past dealings with pot-related games.
As Scott puts it: “We’re in it for the long haul. The industry is developing really rapidly, but it’ll take more years. Until then, I don’t know if [weed delivery apps] will be able to hold on with just the medical market.”
In other words, If you’re waiting on a marijuana delivery service, you might be sitting around awhile. In the meantime, however, interested parties can always do things the old-fashioned way.
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