E-cannabis: California Companies Connect Marijuana with Tech

Silicon Valley is charging into new territory with digital platforms and tools that connect card-holding medical marijuana patients to herbal medications.

by / December 2, 2015
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The unlikely, and yet totally natural, marriage of marijuana and technology is the next big step in the evolution of medical cannabis. Aptly nicknamed the “green rush,” California tech companies are clamoring to fill the gaps in the state's supply chain for on-demand medical marijuana with the application of modern, mobile technologies.

Like the rise of Lyft, Uber and Airbnb, a flood of new applications are simplifying access and giving cannabis patients an easier route to a wider variety of products.

While some in the public policy space remain hesitant to support cannabis as medicinal, laws around the country have continually loosened in the decades since the original debate began. In January, a report found that legal marijuana is the fastest growing industry in the nation. In 2014, cannabis sales reached $2.7 billion, 49 percent of which occurred in California. Sales in Colorado came in second at 30 percent, with Washington, Arizona and Michigan trailing at 8 percent, 6 percent and 4 percent, respectively.
In an upscale office in the heart of downtown San Francisco, the team at Eaze has clearly struck a vein in the state’s medical marijuana marketplace. 

Their clean, modern workspace stands as a testament to what the company’s creator would later reaffirm: This is a technology company, not a dispensary.

That being said, none of the tired “pot culture” stereotypes seem to fit here. There are no bongs left on coffee tables, no posters of Bob Marley, no tie-dyed sheets draped over the windows. 

Eaze mastermind Keith McCarty doesn’t even use cannabis; he just saw a market need and moved to fill it in the best way he knew how. The entrepreneur most recently sold social networking startup Yammer to Microsoft for more than $1 billion.

His company launched its network of partner dispensaries and a fleet of contracted drivers 16 months ago and has seen substantial growth throughout the state in that time. Though McCarty was not in a position to say exactly how many patients use the online portal, he did say tens of thousands of people use Eaze services.

“When we started peeling back the onion, it was very clear that there were certain aspects of products and services that fit into on-demand a little bit better than others,” he said.

With tools for both the patient and product providers, Eaze and its competitors are putting a new spin on the medical marijuana landscape. 

Those with a doctor’s recommendation can purchase vetted products through an online portal and have it at their door within minutes. Once documentation is uploaded to the Eaze servers, patient recommendations are verified for use within the network of partner dispensaries.

Patients also can receive a doctor's recommendation through EazeMD, which is a telehealth diagnostic service similar to other leading on-demand medical cannabis services.

On the business end, dispensaries are able to track product and drivers in real time, cutting down on “black market” opportunities and boosting efficiency.  

Today, Eaze operates in more than 100 cities. What started as a regional enterprise in the greater Bay Area has now grown to another huge market: Southern California. 

Will California Legalize Weed?

In 1996, California legalized medical marijuana, and a law was signed by Gov. Arnold Schwarzenegger in 2010 reducing the severity of possession.

Voters failed to legalize recreational use of marijuana in 2010 under Proposition 19, but 2016 could see a proposed ballot initiative to legalize such use for those 21 and over.

Given that California is about 49 percent of the entire cannabis market, "and then Southern California is about eight to 10 times larger than Northern California," McCarty said, "it was very strategic for us to expand to Southern California."

With the ever-present rumblings that California could soon see another push to legalize adult-use recreational marijuana — like Colorado and Washington — McCarty said the Eaze model will survive and thrive.

“I think the economy is moving toward ‘I want it and I want it now,’ everything is moving to on-demand anyways,” he said. “I think that’s part of the promise of technology, that it drives so much efficiency that you can both provide a better experience and one that is more economical.”

In fact, the company has even entertained the idea of extending into other health-care opportunities, such as on-demand prescription pharmaceuticals. 

“The core of the solution is extensible to the rest of health care. It’s really just about layering in and integrating with a couple other systems,” he said. “We definitely have thought of that as an option. My personal thought is that the cannabis industry is so big and we’re at the forefront of it and we’re in such a good position that we are sort of heads down making sure that we own this industry. We don’t want to be distracted by other things right now, but that is certainly an option.”

But Eaze isn't the only company operating at the intersection of cannabis and technology. HelloMD and Meadow have also carved out their own substantial and loyal patient base within the market. 

Mark Hadfield is the CEO of HelloMD, which offers telehealth conferencing with doctors for cannabis recommendations and facilitates deliveries to medical-use patients. His platform offers qualifying patients an all-inclusive technology solution to get the cannabis medication for ailments ranging from menopause to cancer, he said.

“The patients we serve are legitimate patients,” he said. “For us it’s a question of providing access to people who need this medicine.”

Hadfield said the fragmented medical cannabis environment that existed before new technology solutions came on the scene was the impetus for a streamlined digital solution. He said the old way of doing things was just not conducive to many cannabis patients. 

Through HelloMD’s telehealth system, patients connect with licensed doctors via mobile devices and computers for the purposes of getting or renewing their medical identification cards. 

While the telehealth and delivery solutions carry the inherent potential for other pharmaceutical applications, Hadfield said he wants to remain focused on medicinal marijuana.

Meadow also provides a telehealth and delivery network to California-based patients. Co-founder and CEO David Hua said the company was a chance to not only connect patients with medicinal products, but also provide small, cannabis-based businesses with tools to streamline operations.

“Coming from a startup background, a technology background, I realized there was an opportunity to help small business owners within the cannabis space because many of software providers have largely ignored them because of the laws that are out there for cannabis,” he said. “So, after seeing that problem and from my own experience, ordering and delivery has been a problem in terms of delivery times, consistent product, consistent inventory, so we bridged the dispensaries’ problems with the patient’s problems to create Meadow.”

Through the Meadow solution, patients can consult a doctor and receive a medical recommendation, as well as view curated products and arrange deliveries from trusted dispensaries. Patient recommendations are required to upload their identification and recommendation documents to the secure Meadow servers, and are also required to sign a collective agreement with the dispensary from which they are ordering. The information is then verified to ensure legitimacy of the cardholder.

Until recently, Hua said cardholders relied on a largely phone-based system of setting up home deliveries. Patients are now able to schedule on-demand deliveries through a smooth, reliable interface, all while knowing exactly what they are getting and from who.

The Meadow team has also pushed into the business management software business with the recent launch of Meadow Platform, a backend cloud-based inventory and point of sale solution.   

“We tend to look at this as not just a business opportunity, but more of an area where we can put a lot of our skill sets and backgrounds to something that could use it and bring a different light and perspective for other people to see than what we’ve traditionally seen in the stoner sense. It’s bringing that level of conversation to a higher level,” he said.

Both McCarty and Hua agree that the introduction of third-party technology companies has helped to drive a more productive conversation among the typically polarized camps that make up marijuana advocates, public safety officials and state lawmakers. 

In Colorado and Washington, where recreational, adult-use marijuana is legal, delivery services are not. According to the Washington State Liquor and Cannabis Board, product delivery and Internet ordering are prohibited. In Colorado, medical patients can recieve their prescriptions from a primary caregiver, but recreational deliveries are not allowed, according to the Harris, Moure Canna Law Blog

Unlike disruptive companies Airbnb and Uber, who only looked to policymakers after the fact, cannabis-centric groups have had to work closely with lawmakers and other stakeholders to get off the ground.

“We’ve been way more collaborative with local and state government,” Hua said. “What’s really wonderful is, because this is a new frontier, we have the opportunity of opening ourselves up to legislators and the dispensaries and basically be the connector for everybody and be able to meet the requirements and needs of these various stakeholders through a platform that connects everyone, makes sure everyone is compliant and is auditable.”

Eyragon Eidam Web Editor

Eyragon Eidam is the Web editor for Government Technology magazine, after previously serving as  assistant news editor and covering such topics as legislation, social media and public safety. He can be reached at eeidam@erepublic.com.