'Uber for marijuana:' Snoop Dogg's newest business investment
The , which provides a marijuana delivery service, recently including DCM Ventures, 500 Startups, Fresh VC, and Snoop Dogg's Casa Verde Capital.
As one of the first companies of its kind to garner that much investor support, Eaze鈥檚 success raises questions about the marijuana industry's emergence at a time when the legal status remains hazy. Under federal law, to grow, sell, or consume marijuana remains illegal. The US Justice Department has chosen not to enforce the law in states where the drug has been legalized. For businesses, that raises questions about marijuana sold across state lines.聽
But Eaze is plunging ahead. Based on the instant delivery, community powered premise the Uber car-service made trendy in the startup community, Eaze connects medical marijuana users in California to local dispensaries through a mobile app. Like Uber, it utilizes delivery drivers.
Business opportunities are emerging as restrictions on marijuana are lifted, with many states聽and Alaska, Colorado, Oregon, Washington D.C., and Washington State legalizing recreational use. However, about putting their money behind it and Eaze is one of the first weed-centered startups to get significant backing.聽
鈥淎t the time we invested in the seed, we had a thesis the medical marijuana market would continue to grow, and from a regulatory perspective, it would move toward deregulation,鈥� Kyle Lui, a principal at DCM, . 鈥淭hings accelerated much faster than we had anticipated.鈥�
The market is flooding with so called 鈥済anjapreneurs鈥澛� seeking funding from investors. Dixie One is looking to , while Privateer Holdings recently secured a 30-year license to name.
Other companies are looking to cash in less directly. Among the cropping up are consulting companies to advise dispensaries, tourist destinations catering to stoners, manufacturers producing child-resistant plastic baggies, and a whole host of mobile apps, in addition to Eaze.
Emily Paxhia, founding partner at Poseidon Asset Management, says that not only is there ultimately more money to be made in ancillary markets, but the companies will have an easier time finding investors.
鈥淲e do a tremendous amount of due diligence, but when it comes to companies that touch the plant, it鈥檚 almost eight times that,鈥� .
Therefore, Eaze has an advantage as it is primarily a technology company and does not grow or sell marijuana. DMC sees investing in marijuana as a forward thinking move, despite the legal ambiguity.
鈥淚n a lot of jurisdictions, Uber was breaking the law, Airbnb was breaking the law,鈥� Lui said. 鈥淚 think being forward-thinking, you have to see where the world is going rather than where you currently are.鈥�
Following its large capital investment, Eaze is going on a hiring spree while looking to expand the business outside of California so as to stay ahead of the competition.
鈥淭he plan is to be in every market as quickly as possible that allows for medical marijuana and even recreational use of marijuana,鈥� Keith McCarty, founder of Eaze,, singling out Nevada, Arizona, Washington, Colorado, and Oregon.
