After perfecting alcohol home delivery with a very convenient and easy to use app, Nestdrop.com turned their focus to cannabis home delivery. In this interview with Michael Pycher, Co-founder of Nestrdop we’ll learn how you can enjoy home delivery of alcohol and cannabis.
In this interview you will learn about:
– Michael’s background as a commercial director
– Where the idea for Nestdrop came from
– How Nestrdrop works
– Where you can use Nestdrop
– How you can order alcohol with Nestdrop
– Why the City of Los Angeles is trying to shut down Nestdrop
– and More
Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That’s www.cannainsider.com/trends. Now here’s your program. What is it like to create a mobile app that allows users to have alcohol delivered to their home and then pivot to have that same app also include medical marijuana? We’re going to find out the answer to that question with the founder of Nestdrop, Michael Pycher. Welcome Michael.
Michael: Good to be here Matt.
Matthew: Michael can you give us a high level understanding of what Nestdrop is exactly?
Michael: Of course, happy to do so. Nestdrop is the first mobile app in the country to allow patients to go about finding a local collective, joining it, browsing the medicine that’s available to them and place a request for an order within two or three minutes, and then having it delivered to them in an hour or less. It also allows them to, in the Los Angeles area, find alcohol near them as well.
Matthew: How did you get started in this business? What’s your background?
Michael: So I actually don’t come from a tech background. I was a commercial director for a number of years in Los Angeles shooting a number of different lifestyle commercials. And after some time I realized I wanted to step into a space that I could start from scratch and build something for the long term, and I wanted to create something a little more permanent. And so I started to look at other things outside of commercial directing. And my business partner and I, we met overseas, and we grew close and we saw that there would be, you know, what’s the technology that can be created that there’s a need in the market. There’s a market and there’s something that we can provide. What can we bring that isn’t there yet?
And so we initially stepped into alcohol because you’re allowed to bring alcohol to someone’s doorstep, and we wanted… we thought it would be safer for people to be able to get the product rather than having to go out and get on the road. You know, this isn’t an end all be all to drunk driving, but it helps them avoid it. It helps them not have to do that. So we saw there’s a lot of value there, and so we went for it. As we started to develop that, we would, you know, we meet new people. And we heard of a story of one of our partners in the company who has a close family friend who was suffering from cancer. And she has morphine and the morphine doesn’t work anymore, and you can only take so much morphine and the chemo made her incredibly nauseous, and so she started looking towards CBD to find some sort of relief. And when we heard this story our understanding of what marijuana could do for people started to change. And we educated ourselves. We looked at the market. We understood the space. We looked at the medicine itself as to whether it’s viable, whether it’s actually helping people. And the more research we did, the more we looked into it, the more we became ardent believers. And so we decided if we already have this technology for alcohol, perhaps we can take the same thing we created there, and we’d been doing deliveries for a while with alcohol already, maybe we could apply that to medicinals.
And so it was a very quick transition. It was a matter of getting on our first vendors, reaching out and finding people who wanted to participate with us. And once we had that the technology was already in place, and we were able to get medicinal marijuana ramped up relatively quickly, and I haven’t looked back since.
Matthew: You know, I just want to rewind a little bit here because you got traction really quickly on the alcohol piece type, and I feel like it was a clever way that you did it, a very savvy way. Can you talk a little bit about that?
Michael: Well we realized that we’re not going to be able to tell people to go out there and party and get drunk while at the same time wanting to send the message like be responsible, be smart about it. So we took an approach that was sort of like the cool older brother. Like we know you’re going to have fun. We know people are going to drink. We’re not going to pretend as though like you shouldn’t do that, but if you’re going to do that, just do it smart. Like please just be smart about it. So we put out a little bit of messages, a little bit of advertising out there to get the word out. But then what we found was strongest was the users, the customers really liked our product. They were really happy and they just started… we didn’t really even get that big of a marketing push going, but people started talking about it and we like to believe that just because we put a really good product out there. It doesn’t cost them. It’s free deliveries. It doesn’t cost them. There’s no markup on the product and it’s quick, and we felt as long as we’re putting out a product that did what it said it did and didn’t cost the customer an extra arm and a leg, we hoped people would gravitate towards it and we were fortunate enough that they did. People would post pictures on their Instagrams, post pictures on their Facebook. Oh, look at this, alcohol just came over here. It’s the coolest thing. And fortunately for us putting the good product forward, people were happy, people, were satisfied, and they would tell their friends about it. And that happened to spread the word around. So we got really lucky with that, that people were actually really happy because word of mouth we feel is the best kind of publicity you can get.
Matthew: I want to dig into the medical marijuana aspect in a minute, but just one or two more questions on the liquor piece. Have you become like a liquor retailer or do you go to the local, closest liquor store closest to your customer and then pick up what they want and take it over?
Michael: So we’re actually just the means of communication. We’re the technology, and that’s all we are.
Matthew: Oh, got it, got it. Okay interesting. That’s the best place to be. Okay. And what area of the country do you currently serve right now?
Michael: So right now for alcohol we currently serve most of metro Los Angeles. We’re spinning down to Marina del Rey and all the way up to Tarzana. For medicinal, medicinal marijuana we’re also in all of metro LA. Now we’re in San Francisco, San Jose, Oakland. We’re going to be coming to Oregon soon. We have Temecula, Oxford, San Diego and Orange County coming very soon as well. So the medicinal marijuana is spreading very quickly and very aggressively which has been wonderful. Now we just have to keep up with that with our alcohol side of things.
Matthew: So let’s say I’m a medical marijuana patient living in Southern California, and I’m listening to this interview right now. I have an iPhone. Is it iPhone or Android that you can use Nestdrop on?
Michael: As of today you can only get medicinal through Android. We’re hoping that within three to four weeks it will be available on iPhone as well. Right now unfortunately iPhone has a very stringent stance on medical marijuana which we’re trying to convince them why this is important that patients that have iPhones also be able to access this. But if you have an iPhone, you can get alcohol.
Matthew: Okay. So can you walk me through step by step how someone with an Android device and soon iPhone, what do they actually do? How does this process work?
Michael: Of course. So they’re going to go log into the app and they’re going to create an account. At that point we have to find where they want the delivery to go to. So you can either use your current location where the GPS finds where you are, or you plug in an address that you want it to come to. At that point we know which collective to connect you to. And so we know this is the collective that we believe to have the best product and this is closest to you, and so we’re going to show you their inventory. If you find something you like, if you find the medicine that you’re looking for, you will then be prompted to agree to the terms of joining that collective and you’ll have to upload your documentation, your photo ID and your medical recommendation of doctor’s recommendation.
Once you upload that material it’s encrypted. It only lives locally on your device. It’s not sent into the cloud or anywhere. You select your medicine and then you can check out, and you place your order. That process, if you know where you’re going, the process can take about two to three minutes. Then the collective will review your documentation, make sure that everything’s legitimate and make sure it hasn’t expired, make sure they can clearly read everything, and if all is good, they will let you join that collective and carry out and fulfill your order. If something’s wrong, they’ll cancel and they will let you know why, but the process is rather intuitive. We try to walk you through it in the app, and it’s the fastest way to be able to get your medicine. We have patients all the time that tell us they’re either immobile or they can’t drive, and the ones who need it the most to be honest are the ones that can’t get to dispensaries, the ones that don’t have the option to easily get outside of their home. And so we’re really happy that it’s so easy for them to just go on the phone and within minutes have the medicine brought to them.
Matthew: So if I’m a prospective patient, but I don’t have a card yet, how does that work? Is there suggestions of like doctors near me that see prospective medical marijuana patients that have chronic pain or some other ailment?
Michael: Coming very soon. As of today, no, but we’re aware and we’re working on it and we hope to have that available around the corner, hopefully within the first quarter of early 2015.
Matthew: Now I’m sure this answer is somewhat changing all the time, but what percent of your deliveries are just medical marijuana? What’s just alcohol, and is there both?
Michael: Certainly. So as of right now because we’ve been around for much longer with alcohol, we only launched medical marijuana a couple of weeks ago, and medical marijuana is only available on Android as of late. The bulk of our orders are alcohol, but the medicinal is picking up very fast and very aggressively. And we’ve been… it’s catching up pace a lot quicker than what we actually were anticipating. So now it’s just a matter of us keeping up with the pace of the growth. But yeah, the bulk of the orders I would say, right now, I would say 75 to 80 percent of the orders remain to be alcohol just because medicinal marijuana is so new.
Matthew: Well it’s a good thing you named your company Nestdrop and not something related just to alcohol because you have a lot of flexibility there.
Michael: We knew early on that we were going to be looking at other verticals.
Matthew: Okay good.
Michael: We didn’t want to make it too specific.
Matthew: So do the drivers, do you know if they’re medical patients themselves? How does that work? Because it can’t be just any ole driver can it?
Michael: Correct, no it cannot be any ole driver. Every driver is a medical patient, and they’re a medical patient that belongs to the particular collective that they’d be servicing. We’re not trying to stretch any laws. We’re completely compliant with all the laws, and we’re adamant about that and we’re very strict about that. So if an order gets placed, you can’t just call up a courier. You can’t just like, hey buddy can you run this over there. Specifically a collective can only bring the product to another person within the collect via a member that is also a patient at that specific collective. And so we facilitate that, and we went through lengths to make sure that that was what was set up. So every driver is a patient.
Matthew: So I can see the incentive for a dispensary to want to sign up with Nestdrop because hey I’m going to get more business here. I don’t have the technology to do this myself. I may not have the app name recognition, but to get an idea of how much more business a dispensary might get, I mean, is there any idea or anything you can… any information you can give there?
Michael: Of course. As far as we don’t know how much we’re adding on to their business because we don’t inquire like what’s the business now and this is how much we’re going to grow it. We want… that information is their own private information. So I don’t know if we’re doubling, quadrupling, you know, quintupling their business. We don’t know. All we know is that if you’re a collective in a specific area, there is probably another 40 to 50 to 60 other people in your area, and it’s going to be hard for you to be able to differentiate yourself from your neighbors. It’s a really competitive space, and you need that extra edge to be able to have the differentiating factor and marketing is that and technology is that. Nestdrop takes care of both of that. The technology and the storefront is already there, and we do the marketing on their behalf, giving them the one up on the competition in their local area.
Matthew: Okay. And again, you’re in different geographies, but do you have an average on how long a delivery takes?
Michael: Yep. An hour or less. On average, we’ve been averaging probably around 35-40 minutes, but we say that it’s going to be an hour or less. And we’ve had actually situations where we got there too soon. The customer had thought we’d, you know, get there within 45 minutes to an hour and we actually got there in 8 minutes and they were still in the shower for example. So we’ve had a couple of time where that happened where we’re calling, we’re not there and the driver leaves and they’re like guys what happened? We’re like, where were you, we were there. We were there waiting for you a while. Like, oh you kind of got here too soon. So it’s kind of a middle ground. Customers expect there to be like a half hour lull in between.
Matthew: That is…I can see where this would be very helpful particularly for patients that are home bound or in hospice or something like this, that’s very helpful. What about the demographics? Has anything surprised you about the demographics for your customers are? I mean you have some sense because you have their IDs and so forth, but I mean is it just this total across the board spectrum? Is there more people of a certain age or what information can you tell us about your demographics?
Michael: So Nestdrop actually doesn’t have access. We don’t see the patients’ information and IDs when they place an order. As I mentioned it’s encrypted and it’s sent in a vault to… a vault that only that collective the order is going to has access to. So their information is kept very private. The only thing that we can see is when a customer reaches out to us and we talk to a customer, and we can engage with them and we know who they are. So when that happens we get a sense of who our customers are or if they… through alcohol, you know, our dispensaries sometimes will tell us yeah it was this kind of, it was you know, it was an older woman or it was a younger guy just to let us know if a situation happened. You know like for example, we got there too soon and the guy was in the shower.
Our demographics seem to be extremely, extremely varied. It’s not what we suspected. There’s older people who are seasoned businessmen who you know, can’t openly… don’t want to openly partake in going to dispensaries and don’t want to openly be out there in the world, but want to be able to use the medicine discretely. We have older women actually who have some sort of, whatever condition is ailing them, that are very regular users because they need pain relief. And alcohol has been so varied. We have collectors. We have people who order regularly for parties or hosting. And then you have like the younger crowd, that you know, they’ll place a smaller order because they have a few buddies coming over. So it’s been extremely, extremely varied which is great. For alcohol it tends to be around the mid-thirties. Males tend to be the most frequent. For medicinals, like I said, we don’t have access to that information so it’s hard to get a gauge on who specifically is ordering what.
Matthew: I don’t know if you saw this, but Amazon filed a patent that for technology that would allow for your order to be placed by Amazon before you actually place the order. So it would be a predictive kind of artificial intelligences that says, okay Michael wants a six pack of Heineken—just using your alcohol example—and you haven’t even thought about it yourself yet. I mean seeing how technology’s progressing, seeing how things are changing. There’s this exponential growth in technology evolution. Do you see this type of thing coming to the cannabis, the alcohol arena? It seems even crazy to pose this question, but it looks like this type of thing is starting to happen.
Michael: I’ve got to say we haven’t hired any mind readers yet which Amazon might have found. But I think it’s important regardless of what industry you’re in. If the technology is coming out, it’s important to stay with the times. So no matter what’s the most latest and greatest, we intend to be able to adapt to whatever the space allows for. And mind you there’s different… we can’t play by the same rules Amazon can because we’re currently dealing with specially regulated products. That means you need to have an ID. You need to be of a certain age. You have to show that ID in order to be able to place an order with alcohol and both with medical marijuana. So we have to follow different restrictions and guidelines that Amazon might not require just because it’s regulated products. But if there’s technology out there can predict an order before it happens, we’re all about it. That’s for sure.
Matthew: Yeah that would be great if that could happen. Like it’s getting around lunch time here in Colorado. Like if there’s some artificial intelligences that knows what I want for lunch before I can think of it, then I would be down with that.
Michael: I would have been down with that for a long time. That would be great.
Matthew: So your focus is California right now. And 2016 might be a huge year for cannabis in California. What do you think is going to happen there?
Michael: From all the whispers and conversations behind closed doors, it sounds like California will join the ranks of Oregon, DC, Washington and Colorado as far as legalizing marijuana. It’s a really opportune time right now to get in the space and establish yourself as a player in the medical marijuana space because we believe, from everything we’ve heard, it seems pretty convincingly that California will legalize marijuana. Again I don’t want to speak prematurely on the issue and I don’t want to presume anything. And so we’re going about operating as though… the same whether it happens, whether it doesn’t happen. But I think that there’s enough education and there’s enough knowledge amongst the everyday citizen, even if they don’t use medical marijuana, that everyone tends to understand that it’s no longer a harm to society, no longer, the perception. There is an economic boost that will come from it. It’s not hurting people. There’s people who genuinely need it, and they are now seeing more of the benefits versus the downsides of having this around. And so with that further education and with less naivety about the subject, we’re hoping that enough people out there would agree. And so 2016 we think is going to be a pivotal year , and we hope it’s going to go in the right way.
Matthew: So this Uber-like technology for a lot of different market verticals has an amazing impact in making our society so much more efficient. We don’t have to… we can share resources much more efficiently. How far do you see this technology going? Are you going to be getting into any other verticals apart from alcohol and medical marijuana?
Michael: We are. We actually have a number of other verticals on the way we’re really excited about coming up very soon that are a lot more… they’re not as controversial as alcohol and marijuana, a lot more user friendly. And we’re really, really excited about those. The technology we’ve created is a platform for people to get these services brought to their door. And there’s a lot to do. There’s a very long term picture that we’ve been creating, and those verticals will be coming in a lot faster than what we initially anticipated because we are really happy with the technology that we’ve created. We’ve worked out the bugs, and we know how it works. So now it’s just a matter of keeping pace. And there’s so much cool things that’s going to come down the road. I mean if you were talking about Ubber five years ago or someone would get into a car of a stranger to get a lift or Air B&B, people would have looked at you like you’re nuts. And now it’s become commonplace all over the world. And so we want to be able to help innovate and help bring these types of technology to people. And we’re the first and currently the only app that can bring you your medicine through a phone, you know. And we want to continue to innovate and continue to have the new stuff because that’s what users want, and if that’s what they expect, that’s what Nestdrop hopes to deliver.
Matthew: And in closing how can listeners learn more about Nestdrop?
Michael: www.nestdrop.com has all the information of what we do, who we are and you get a little feel for what we’re about.
Matthew: Great. Thanks so much to Michael Pycher of Nestdrop for coming in CannaInsider today. Thanks Michael.
Michael: Thank you so much Matt. All the best.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us email@example.com. We would love to hear from you.