Picture this, you want some high-quality cannabis delivered to your door, you use Eaze to explore strains on your phone and 10 minutes later there is a knock at your door with your cannabis. In this interview with Keith McCarty CEO of Eaze will detail the promise and obstacles facing rapid home delivery of cannabis. Learn more at Eazeup.com
Eaze has raised $10 million from investors including DCM Ventures, 500 Startups, Fresh VC, and Snoop Dogg’s Casa Verde Capital
[1:05] – Keith’s background
[1:54] – Keith explains how Eaze works
[2:49] – The accuracy of Eaze’s algorithm
[3:21] – The plan to expand Eaze beyond San Francisco
[4:02] – The number of people using Eaze
[5:27] – Platforms that support Eaze
[5:55] – Pushback from iTunes
[7:44] – How payments are handled with the use of Eazes
[10:30] – Keith explains the next step in this technology
[12:21] – Keith discusses the regulators in Southern California
[14:46] – Contact details for Eaze
Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.
More and more entrepreneurs are creating innovative apps that will help medical marijuana patients and adult users get their cannabis in an Uber-like, frictionless way. One such application is called Eaze, and I’m pleased to have Keith McCarty, CEO of Eaze here today. Welcome Keith.
Keith: Thanks for having me.
Matthew: Keith I want to get into what Eaze does exactly, but before we get started can you give us a little background on yourself?
Keith: Yeah my background’s in technology. So, you know, most recently I helped start a company called Yammer. It’s a Facebook for the enterprise we started in 2008 and sold to Microsoft in 2012 for a little over a billion. And my passion and everything that I do now is all geared around how to be innovative in the technology space.
Matthew: So I hear the Rice O’Roni bell ringing. Are you in San Francisco?
Keith: I am, yeah, that’s the cable car.
Matthew: How perfect for a San Francisco setting. That’s great. Okay. Yes, I’ve definitely heard of Yammer. That’s a great acquisition. Kudos to you. Good job.
Keith: Thank you.
Matthew: Now digging into Eaze, can you tell us how it works at a high level?
Keith: Absolutely. So it’s really easy. I mean one of the things we want to do is enable patients an easy, quick and professional way for them to get their medicine, and so that starts with the sign-up. So you go to www.eazeup.com, and we’ll ask for information for us to be able to verify your eligibility that you’re actually a medical marijuana patient. And then once you’re into the solution it’s just a matter of three clicks to really request that delivery. So you choose your strain. You choose your quantity, and then we’ll automatically detect your current location. We’ll provide a real-time ETA in terms of deliverability time to where you are at that moment. And when you click “request delivery” we’ll automatically dispatch the nearest driver that has that strain or that medicine that you’re requesting.
Matthew: So is there some sort of algorithm that looks at the available drivers and then comes up with a estimation, and how accurate is that?
Keith: Extremely accurate. Yeah, I mean you’re absolutely right. So we know what the drivers have with them. We know what the patient is requesting. We know where the driver is, and we know where the patient is. So between, you know, those dynamics we can certainly provide a real-time ETA, and it’s as accurate as, you know, an Uber-like solution or any other one would be.
Matthew: Okay. Now right now is Eaze confined just to the San Francisco peninsula, is that correct?
Keith: That’s correct.
Matthew: Okay. And what’s the plan to expand to other geographies?
Keith: Yeah so the way that we developed the technology we can scale extremely fast, right. We partner with dispensaries that already have, are set up within each of the territories that we look to expand into. And for us it’s really just a matter of flipping on a switch. And so, you know, in terms of our expansion strategy, you know, we’re looking at the broader market and where the demand is, where the regulatory framework really makes sense for us today, and then also where that’s moving to. So yeah, like I said, from a technology prospective, you know, we’re there. We can expand tomorrow. It’s more strategic for us though.
Matthew: And how many people are using Eaze right now?
Keith: So Eaze launched a few months ago, and there’s tens of thousands of patients that are already using the solution.
Matthew: Is there a charge for using Eaze, or is it totally free to the end user?
Keith: So the business model is that Eaze is free to patients, and we actually work with partnering dispensaries to charge them for the lead generation services that we provide. As well as, you know, once the delivery is requested by the patient, we provide a lot of technology and route optimization for the actual drivers to increase that KPI of deliveries per hour per driver. And in turn that actually reduces cost per delivery for the dispensaries. So to answer your question it’s free to patients, and we actually work with dispensaries and the charges are on them.
Matthew: So you mentioned just a lead generation service. So there is no Eaze drivers per se. It’s all kind of, it’s just the technology that you’re facilitating for both parties.
Keith: That’s correct. Yeah we work really closely with the dispensaries so obviously we model our service off of the other on demand consumer services that are out there like Uber, Lyft, Postmates, you know, etc. And so, you know, we’ve learned a lot in just being in that tech hub, that tech community. And we instill a lot of those best practices from a driver operational prospective with our partnering dispensaries, but ultimately the drivers do work for the dispensary.
Matthew: Okay and what platforms is Eaze on currently?
Keith: So Eaze is mobile web, and our driver side applications are on both Android and IOS, and we’ll be offering an Android patient side application soon.
Matthew: And I know that sometimes iTunes is giving a little bit of a pushback on the cannabis applications. Did you experience that at all or was it frictionless for you?
Keith: Yeah we absolutely did. So, you know, we’ve been working with Apple since the beginning of the year, and Apple has certain guidelines around what they allow on their platform and what they don’t allow. And we could certainly build an application for what we’re doing to fit into those guidelines. We can figure that out, but there becomes a certain point where the patient experience starts to really diminish the more that you go down that path, and so strategically we made a decision to not offer, you know, an IOS app at this time.
Matthew: That’s pretty interesting. So you sidestepped them to give all the features and benefits to both the dispensary and the customer, missing out potentially on all of the eyeballs that you would get in iTunes, but you feel that it’s worth it.
Keith: We feel like the solution is naturally social, and I think that the numbers speak for themselves that although we would love to be on the iTunes store and have all those additional eyeballs, we really feel that the growth through the solution is going to come through virality, not through organic search on the iTunes store.
Matthew: Okay. So let’s say it’s a Friday night. It’s 7 o’clock. I live in the marina district of San Francisco, and I order 4 grams of cannabis. How long would that take? What would you say? I mean I know there’s a lot of variables in there, but what would you say at a high level?
Keith: So I can tell you that in San Francisco because of the algorithmic model that we’ve created around driver route optimizing, our average delivery time in San Francisco is ten minutes.
Matthew: Wow. Wow, that is fast. Okay. Now how is payment handled between driver and customer or does it go from driver back to dispensary? How does that work?
Keith: So the patient pays the driver. The driver works for the dispensary, and we then charge the dispensary. So the payment is actually processed between the driver and the patient. And then we obviously bill the dispensary who we partner with.
Matthew: Okay. So let’s say the driver does a poor job or does an excellent job, is there a way to review them or give feedback back to the dispensary in some way or back to the community at large?
Keith: Right. Yeah, that’s actually really important, and that’s actually a differentiator for Eaze in this whole on demand consumer service space within the cannabis category specifically is when you click “request delivery” your experience with Eaze does not stop there. Actually that’s where it just begins. So we keep the patient updated as the delivery is in progress with real-time delivery ETA updates. Meaning that as the driver’s getting closer you’ll actually see the counter decrease from, you know, 10 minutes to 8 minutes to 6 minutes etc. When they get to certain points in that delivery, you’ll receive text message updates, and then even after you’ve received the delivery then we want to understand how that delivery experience was.
So you will rate your delivery immediately. You know, did the driver have good ediquette, was he polite, did he understand the strain that he was delivering to you, and if you had any additional questions, was he able to answer those. So we’ll rate those, we’ll ask for a rating immediately after the delivery. And then some period after that, after we feel like you’ve had a chance to consume the medicine, we’ll actually ask you to review the strains themselves, and once again that’s a one through five star rating. And what Eaze is really trying to build is this strain graph. So similarly to what Facebook has in terms of the social graph or the friend graph. When you go to Facebook, you know, it’s wow how did they know who all my friends are. We want to build something similar for cannabis patients so that, you know, if you were to rate a certain strain five stars, we could actually recommend, based on our graph of ratings what you’re most likely to enjoy during your next order.
Matthew: That’s incredible. Uber has only been around for I think a few years now, but it has changed the game, and now we talk about what you’re doing here with Eaze as if it’s been part of our culture for, you know, a decade or two decades or something, but it’s really just changing the landscape of utilizing resources in an urban space. How do you see this type of technology evolving? What’s the next step? How do we go beyond Uber? Is it going to be drones delivering goods or what do you see?
Keith: Well obviously I’m bullish on this whole on demand consumer service category as a whole. You know when Yammer got acquired by Microsoft I was at Microsoft. I had a one year commitment. I was really looking at the next wave of technology, what is that going to be. And, you know, Uber and Lyft did a great job of paving the way within transportation. Then we started seeing other companies pop up in other categories such as food and drink or home. And, you know, I think that there’s this whole other category called healthcare that Eaze is really paving the way with. You know, I think the possibilities are kind of endless. Once you have those algorithmic models built into a solution to provide a really relevant experience to where people can with a click of a button get what they want and need, yeah, it’s going to be fascinating to be part of that. And I absolutely think that robotics delivery will be the future of this entire space. But, you know, I think Google made a strategic investment in Uber because of the self-driving cars that they’re building, and I absolutely see drones in the future of cannabis delivery with Eaze.
Matthew: It sounds like science fiction, but I’m sure it’s going to be here faster than we can even realize. There’s an app on my phone called Relay Rides and I can use other peoples’ cars and there’s like three people within a mile of my house that participate in Relay Rides. You just approach the car, it lets you in. It’s just unbelievable. I can’t believe how fast this is changing the game. But there is a couple of threats on the horizon for Eaze type technology. I know in Southern California right now, at this moment, as we’re speaking the regulators down there are kind of making a stink about the Eaze type technology. Can you tell us a little bit about that and how you feel about that?
Keith: Yeah I mean I think the regulatory landscape is ever changing for one, right. So I can give an anecdotal evidence of that, right. So when we started this project last October, I would ask the lawyers, you know, when is A, B and C going to happen. You know to their best judgment they would say well it’s tough to predict but maybe you know that’s a couple of years out. And you know fast forward six months I would ask them the same questions, and they would say well we’ve really made a lot of progress there, that’s more likely going to happen in six months. So not only are the laws kind of changing in the right direction, but they’re also moving exponentially. And I think that, you know, to your earlier question around expansion where is Eaze expanding next, the regulatory landscape today is certainly part of it, and we are in cities or territories where we’re absolutely following all the local laws and have a great relationship with, you know, the health department and authorities here. There may be other territories where we’re really gearing up to launch there, but we haven’t launched there because of the current regulatory landscape, but we view that changing very quickly, and L.A. may be one of them.
Matthew: Okay. Now is there any parallel markets where you would like to take this existing technology and say just to apply it to another market vertical at all?
Keith: Yeah so Eaze is, you know, we kind of brand ourselves as a on demand healthcare delivery service starting in medical marijuana. To be honest I view the medical cannabis space as a big enough category that we may not need to or want to kind of enter into these other, you know, ways to deliver other types of medicine. But I can tell you that from a technology prospective we hedged our bets in that we’ve developed a technology in a way where you can very easily start to introduce other types of prescription type medicine and with a click of a button also, you know, receive those. Really at the root the technology is all about verifying eligibility, being able to receive the medicine, an easy to display menu based on where you are, and provide real time ETAs and with a click of a button have that dispatched to the closest driver that can fulfill that need. And that’s applicable across, you know, any other type of medicine.
Matthew: Keith in closing how can listeners learn more about Eaze?
Keith: Yeah the best way to learn more about Eaze is to go to the website. It’s www.eazeup.com. And everything you need to know is there.
Matthew: Great. Well Keith thanks so much for being on CannaInsider today. We really appreciate it.
Keith: Thank you for having me.
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