Pubdate: Tue, 29 Jul 2014 Source: San Francisco Chronicle (CA) Copyright: 2014 Hearst Communications Inc. Contact: http://www.sfgate.com/chronicle/submissions/#1 Website: http://www.sfgate.com/chronicle/ Details: http://www.mapinc.org/media/388 Author: Carolyn Said DELIVERING MEDICAL POT WITH EAZE S.F. startup brings medical marijuana to clients' doorsteps. Tap your smartphone to summon delivery of medical marijuana, arriving more quickly than a Domino's pizza. Brant Ward / The Chronicle An Eaze delivery person will arrive at a medical marijuana patient's door with buds sealed in plastic bags. That's the vision for a San Francisco startup launching Tuesday that says it wants to be the "Uber of pot." Eaze (www.eazeup.com) says it has relationships with an unspecified number of local dispensaries as well as dozens of drivers piloting their own vehicles. Deliveries will be free for patients, with driver fees and Eaze paid by dispensaries in exchange for gaining new business. "We're offering the revolution of on-demand services for medical marijuana patients," said Eaze CEO and founder Keith McCarty, formerly an executive at enterprise social network Yammer, which was acquired by Microsoft for $1.2 billion. As an early Yammer employee, "I had a good exit there and so I bootstrapped Eaze, but we're seeking funding from angel investors and thought leaders," he said. For now, the four-person startup is based out of McCarty's Russian Hill apartment, where he was busily assembling driver kits on Monday. Each driver will start a shift by picking up a kit at a dispensary preloaded with 8 ounces of pot - the legal limit they can carry. Typical sales are one-eighth ounce, or 3.5 grams, which sells for about $50. "Having (enough supply for) 64 deliveries on them means they can get to patients in an average time of 10 minutes," McCarty said. "That's a compelling value proposition." Eaze will verify customers' legal rights to buy marijuana by reviewing images of their doctors' notes and drivers' licenses, submitted online. Drivers' cars will be unmarked - important because they must accept cash for deliveries, due to strict federal rules regulating banks and credit card companies. The service will be in operation daily from 8 a.m. to midnight. Drivers will make $10 per delivery. McCarty wouldn't say how much Eaze would collect as a commission from dispensaries. Marijuana delivery is nothing new. Hundreds of delivery companies, including dozens in San Francisco, are listed on www.WeedMaps.com, which acts as a Yelp for pot-industry companies. Many dispensaries offer free delivery. A Washington state company called Canary, founded by two students, also calls itself the "Uber of pot" because it uses a smartphone app. McCarty said those other services are analogous to the taxi industry, as slower, less-reliable, older methods, versus Eaze's high-tech approach. The company is launching with a mobile-friendly website. It hopes that Apple will approve its iPhone app, which had to remove all mentions of pricing and make other changes to conform to the company's guidelines. An Android app is pending. Expansion plans After it works out the bugs in San Francisco, Eaze hopes to expand to Southern California, Colorado and Washington state. It eventually may offer delivery of recreational pot in states such as Colorado and Washington where it's legal. For now, Eaze will only deliver marijuana flowers until it has legal resolution about consumables - marijuana brownies and soda, for instance - oils and waxes, McCarty said. Drivers - called "caregivers" by Eaze - must pass criminal and driving background checks and must themselves be medical marijuana users so they are legally allowed to carry 8 ounces. "We want them to be able to relate to the patients," McCarty said. McCarty says they won't drive under the influence - and that the company is considering some form of drug tests for employees. "We don't have a protocol yet, but plan to do it," he said. According to McCarty, Eaze carries insurance in addition to the drivers' personal policies, but the company did not respond to a request for more details on the amount and type of its policies. Popular services Justin Hartfield, CEO of WeedMaps in Irvine, said delivery services are very popular as many patients are homebound or don't have reliable transportation. For a tech-enabled service, the biggest convenience would be paying via a stored credit card, he said. However, that is not possible for Eaze or any other company under current federal laws for banks and credit cards. "Most businesses that handle marijuana, including delivery services and storefront dispensaries, have found it very, very difficult to get a bank account because of federal laws," said Chris Walsh, editor of Marijuana Business Daily in Rhode Island. "Banks take on huge risks doing business with the industry, although some will do it under the radar." Accounts for marijuana-related businesses can easily be frozen by federal authorities and have their assets seized. As a result, most companies deal entirely in cash, which presents huge organizational and security problems. Eaze has a bank account because it positions itself as a technology company, McCarty said, but it doesn't accept credit cards. "We're not a delivery service; we're the technology that automates connections between patients and dispensers," he said. Marijuana remains classified as a Schedule I drug by the government, but pot entrepreneurship is growing. So is legalization of marijuana - currently 23 states and the District of Columbia allow medical pot use. 'Green rush' "I'm seeing a huge 'green rush,' " said Hartfield who has more than 4,000 companies listed on the site he founded in 2007, as well as more than 500,000 registered users. "There are lots of opportunities for pioneers in all aspects of business." Smartphone delivery is a rational next-step considering the popularity of existing delivery services, said Walsh. However, he was dubious about the "Uber of pot" claim. "We see a lot of companies compare themselves to a well-known brand to gain buzz," he said. "The Costco of cannabis, the Walmart of weed - you hear those terms thrown around all the time." - --- MAP posted-by: Jo-D