04.15.2016
policy

Here's What's Driving Weed Delivery Crazy in California

As goes the Golden State, so detours everyone else.

California’s Wild West medical-marijuana laws are a chaotic patchwork of conflicting local policies confusing the mellow out of pretty much everyone involved, weed delivery services especially.

The legal ambiguities are particularly problematic in Los Angeles, where city attorney Mike Feuer, thanks to the supremacy of local measures, has launched a vigorous attack on the city’s dispensaries. Feuer’s held his position for less than three years. That’s been more than enough time for him to shut down upward of 500 businesses.

The politician has been unrelenting in asserting that delivery-only services are patently illegal under Proposition D, a measure passed by L.A. voters in 2013 aiming to restrict the number of dispensaries in the city to 135 or fewer. The measure was fraught with complications from the get-go: Marijuana delivery was addressed nowhere within it.

In late 2015, after 19 years of failing to enact any statewide regulations surrounding medical cannabis, lawmakers passed a trio of regulatory bills known as the Medical Marijuana Regulation and Safety Act (MMRSA). Slated to fully take effect in 2018, the MMRSA allows for weed delivery services under a specific set of conditions, but ultimately leaves the decision of whether or not to permit them to local jurisdictions.

“Los Angeles is tricky at the moment,” says A.J. Gentile, co-owner of SpeedWeed, an L.A.-based delivery service Feuer is suing. “When the Proposition D zoning ordinance was passed, it was designed to stop the hundreds of dispensaries that seemed to be popping up on every corner. However, it's a pretty broad-reaching ordinance and some of the language is murky, which is problematic for businesses that are trying to operate compliantly.”

The technology-based delivery service Eaze created an elegantly simple business model that allows it to maintain a safe distance from the hot mess that’s L.A.’s medical marijuana law. Fashioning itself as an “Uber for pot,” the company only operates in locales where marijuana delivery is unequivocally legal.

Created by tech entrepreneur Keith McCarty—whose preceding venture Yammer was bought by Microsoft—Eaze relies heavily on data to inform its business plans. The company never actually touches weed; it simply facilitates deliveries, vetting retailers in the 100-plus California cities it operates in before forging a partnership.


Image via Eaze.MD/Facebook

EazeMD's website and app facilitate $40 video consultations with physicians for people seeking recommendations for medical pot. If patients qualify, they will be mailed a rec and can immediately order medicine from Eaze. It will be delivered in a promised 20 minutes or less, a timeframe the company aspires to adhere to for every transaction.

“On-demand is more and more prolific because of the other on-demand services,” says McCarty.

It’s unlikely Feuer will end his rampage against L.A.’s medical marijuana delivery services any time soon. Plenty more remain operational within the city. 

Eaze's data-driven technology could transform the entire cannabis industry. It can effectively analyze and track individual markets, flagging, for instance, areas where dispensaries have been banned, but nevertheless have a significant number of residents who want medical marijuana to be made available to them. Eaze uses this data to educate lawmakers and law enforcement with facts they may not have been privy to.

“We get to sit at a table and help the industry bridge the gap. You can bring them the numbers,” says Elizabeth Conaway, a public policy expert with Gide, the public affairs consulting firm working with Eaze. “The more data we show these regulators, the more they understand.”

On the opposite end of the marijuana delivery spectrum, companies like Nestdrop and SpeedWeed carry out deliveries themselves. These entrepreneurs have found themselves tied up in a civil lawsuit brought against them by Feuer for being in violation of Proposition D.

An appeals court upheld the injunction against Nestdrop prohibiting it from facilitating deliveries of medical marijuana within Los Angeles. SpeedWeed’s case is ongoing.

It’s unlikely Feuer will end his rampage against L.A.’s medical marijuana delivery services any time soon. Plenty more remain operational within the city. Perhaps, once the trio of regulatory bills passed last year are fully implemented, L.A. will adopt a softer stance.

Under the MMRSA, delivery services aren’t banned so long as they have a storefront dispensary or office to serve as a home base. While this stipulation is sensible, according to the California Cannabis Industry Association (CCIA), a provision of the law that leaves whether or not to permit marijuana delivery up to local jurisdictions is not ideal.

“We don’t think local government should be able to regulate delivery of a medical product,” says Nate Bradley, executive president of the CCIA.

Currently, he estimates marijuana delivery accounts for about half of all retail sales. Delivery bans, if they persist, could serve a major blow to the industry. The new law has the potential to lead to mass closures of noncompliant dispensaries and delivery services, and put more money in the hands of fewer businesses.

“We are starting to get delivery-focused in society in all aspects. It’s only natural that, more and more, delivery will take up more of the industry,” Bradley says.

It’s unclear how many retail medical-marijuana businesses currently operate in L.A. In 2014, 450 of them filed renewals to pay the city’s business taxes. The rough estimate is more than three times what Proposition D allows for, and begs the question: Is attempting to regulate marijuana a futile endeavor?


Image via j3an/VSCO

“Over time, we believe delivery will be the primary way consumers receive marijuana."

“Marijuana delivery services in California pop up and disappear … on a daily basis,” says Jenna Shuck of Aquarius Cannabis, the branding company that recently acquired SpeedWeed. “With California’s impending regulation, I think we’ll see more stability in the number and quality of services available to consumers. Compliance and operating costs will weed out the low-quality operators and competition between quality brands will intensify.”

Weed persists as a polarizing substance. An increasing number of Americans support its decriminalization and legalization. On the other side, anti-pot crusaders are willing to fight legalization to the death. It may be a while before the cannabis industry joins the ranks of other businesses.

“For years, cannabis has been a black-market industry. People are slow to accept this as a legitimate business,” says Gentile, co-owner of SpeedWeed. “With enough time and education, a fair regulatory structure can certainly be implemented.”

Sane implementation may be easier said than done, at least in Los Angeles, where Proposition D is proving to be somewhat of nightmare. Gentile would like to see a major overhaul of the measure, or even better, its elimination.

“After Prop D was passed, the state passed the MMRSA regulatory structure, which could solve some the Prop D confusion, but only if the City decides to defer to state law,” says Gentile. “This seems to be the most logical step—and most fair—but nobody really knows what's going to happen. Clearly, L.A. needs to rethink, restructure, or repeal Proposition D.”

Proposition D's real victims are the patients.

“Delivery is very important for patients who are homebound or bedridden because of their disability or age,” says Don Duncan, California director of the nonprofit Americans for Safe Access. “Los Angeles is a tough place to get around, anyway, if you’re sick.”

Take 21-year-old Bay Area resident Amanda Owen who suffers from debilitating migraines. Without fail, her agonizing eight- to 16-hour headaches, including nausea and throbbing pain, are preceded by painless visual hallucinations. If she medicates with CBDs during this preliminary phase, the migraine won’t come. It is far too dangerous for her to operate a vehicle while hallucinating. When she doesn’t have her meds on hand, delivery is her only viable and safe option.

“I’m able to open the app on my phone, select my medicine, and have it delivered to me in less than 15 minutes,” she says, referring to the tech-based service Eaze. “It means so much to me to no longer have to live in fear of getting a migraine.”

Image via fourtyacres/VSCO

Pharmaceutical prescription drugs can be obtained through delivery or mail-order. Pro-pot activists argue medical cannabis patients should be granted the same access.

An initiative to legalize adult recreational consumption of marijuana is up for grabs among California voters on the November ballot. If it passes, it’ll create two different worlds, one for recreational pot and one for medical pot. The laws regulating medical marijuana will potentially remain the same, with delivery maybe taking a more significant chunk of the market share.

“Millennials are piecing their life together using apps to handle their laundry, find a dog sitter, and deliver their weekly groceries. I expect them to use delivery to purchase the trending cannabis products,” says Schuck of Aquarius Cannabis. “On the flip side, baby boomers are the fastest growing market segment of cannabis users. Many prefer the discretion, convenience, and safety of home-delivery products.”

Storefront dispensaries are a novelty, especially for new medical cannabis patients, who may feel like a kid in a candy store every time they walk into one. But, like everything, the newness fades and convenience wins out. This is the point where delivery services will flourish.

SpeedWeed’s Gentile says:

“Over time, we believe delivery will be the primary way consumers receive marijuana. It will take months or years for cities to understand this. Eventually, voters will express this to their elected officials. Even if someone is completely against marijuana use, we believe that Americans would respect the right for their neighbor to use legal cannabis in the privacy of their home. I think the regulations will have to be different for delivery services versus storefront dispensaries, because the business models are very different, but time will tell.”

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