The man idling his car in a shopping center parking lot near Cal State Fullerton one recent afternoon is named Alex. No last name. Just Alex. The parking lot is inconspicuous, and a perfect spot from which to spring into action when a customer orders some of the wares stored in the trunk. “In Fullerton,” Alex says, “we get a lot of orders from near the college.”
There’s a smartphone mounted on the dashboard that shows an app developed by Eaze (sounds like ease), a San Francisco-based startup company founded by a Chapman University graduate. At about 4:50, the app beeps to life. An order has come in. Alex exits the car, rummages in the trunk, and returns with two one-eighth-of-an ounce packets of Trainwreck, a strain of marijuana that Eaze describes on its website as “a mind-bending Hybrid with potent sativa effects that hit like a freight train.” Alex puts the packets in a white paper bag.
The customer has provided an address only a couple of miles away. The app also displays the customer’s driver’s license and medical marijuana card. “When I get there, that face better match,” Alex says as he maneuvers his car out of the parking lot.
There was a time when what Alex has in his trunk could have gotten him arrested and sent to prison for possession with intent to distribute a controlled substance. But the use of marijuana for medical purposes has been legal in California since voters passed the Compassionate Use Act in 1996, and now—with more than 20 initiatives vying to make the November ballot—pot delivery has become a booming industry. According to Weedmaps, an “online legal marijuana community,” delivery services in Southern California alone have nearly tripled in three years, from 877 to more than 2,600.
Eaze is a tech company that Orange County native Keith McCarty launched in San Francisco in July 2014. It already has raised $12.5 million from venture capitalists toward its goal of becoming the Uber of marijuana delivery. McCarty has combined algorithms and marketing—plus some political savvy—to create an enterprise that now claims to deliver weed to more than 100,000 people in more than 80 California cities. According to Eaze, customers can get pot delivered to their door faster than pizza. With a new feature called EazeMD, the company even can help a customer get a medical marijuana card in minutes, all via smartphone.
“It’s just taking off because of the convenience,” says Alex, a personable former restaurant manager and Uber driver who began delivering pot in September. “You’re sitting at home eating or something, you want some (weed). ‘Let’s just call Eaze.’ ”
McCarty’s parents, whom he describes as “conservative, middle class,” still live in Orange. When he told them about his new endeavor, his mom asked, “Isn’t this just a glorified drug-dealing service?’ ” he says.
“Until then, I hadn’t taken the time to educate myself about medical marijuana,” Vicky McCarty recalls. “I was in shock.”
Keith assured his parents he’d been doing due diligence, and he realized that marijuana “isn’t just a fun sort of thing. People really need this. The challenge is, how do we get it to them?”
The original solution was to distribute pot through storefront dispensaries. But some 200 California cities have banned them, many citing concerns over secondary problems such as sales to minors, loitering, heavy vehicle and foot traffic, increased noise, and customer robberies. Services have sprung up to deliver medical marijuana to patients who live in communities without dispensaries or who have afflictions that restrict their mobility. But many services have been prone to complaints over timeliness and reliability, with some customers being given a window of several hours in which to expect their package. “In this industry, people want and need predictability,” McCarty says. “You wouldn’t order something on Amazon unless you knew you could get it in two days.”
McCarty is well-qualified to tackle the challenges. He studied business administration at Chapman with a concentration on finance and marketing, graduating in 2007. After working for the genealogy and social networking website Geni, he helped create Yammer, a social network for businesses that was sold to Microsoft for $1.2 billion in 2012. McCarty stayed on at Microsoft for a year before leaving to investigate “the new wave of technology.” Uber and Lyft, he noticed, “were paving the way for this whole on-demand economy.” If you could click a button on an app to get food delivered, why not pot?
Eaze uses algorithms to route orders to the driver who is geographically closest to the customer. “Of course there were taxi cabs before Uber, and there was marijuana delivery before Eaze,” McCarty says. “Really, it’s about connecting the consumer and the service provider, the patient with the driver, in real time … to get that product to the patient the fastest.”
Eaze doesn’t actually sell pot. The service is free to patients, and Eaze charges a fee to dispensaries for the technology services it provides. The prices on the Eaze menu are comparable to what a patient would pay at a dispensary. Drivers are screened by Eaze but, for legal reasons, are employed by the dispensaries. Alex collects his inventory every day from a warehouse—what he doesn’t sell goes back to the warehouse at the end of the day. The app that drivers use keeps track of what he has in the inventory. He generally delivers within a 20-mile radius and his longest delivery time has been about 40 minutes. “I just click on (the app)—where it’s going, what the product is—deliver it and take the money,” Alex explains.
“Do you smoke?” he’s asked.
“Yes,” he replies, hastening to add, “for medicinal reasons.”
McCarty doesn’t use pot, but he has a passion for what he’s doing, which he readily, and rapidly, conveys in language that is part tech geek, part surfer. (As a kid, he “drop knee” surfed the infamous waves of the Wedge at Newport Beach.) “We have patients with cancer, MS, epilepsy, different things where there’s a barrier for them to even get to the dispensary,” he says. “Delivery makes a lot of sense there. The best way to do it is to optimize through technology like we have.”
While the venture capital funding has enabled Eaze to move into new territories—including Santa Cruz, the westside of Los Angeles, Orange County, and San Diego—the company also has marketed its service aggressively. Through its Ambassador program, for example, customers can get a $10 credit for every new customer they refer to Eaze. “I deliver plenty of orders that are free because they have credits,” Alex says.
Delivery services have run into trouble in Los Angeles, where the city attorney’s office has sued two—Nestdrop and Speed Weed—for violating its pot shop ordinance. McCarty says Eaze is different because it is not a delivery service, but a technology provider that automates the connection between patients and dispensaries.
McCarty has also been active in Sacramento, helping shape the marijuana regulation bill the legislature passed last year. While recreational use might be on the horizon, McCarty is more focused on building demand so Eaze can use more drivers. “More drivers creates saturation, which then drives more deliveries per hour per driver,” he says. “As a result, you not only get faster delivery times, but also lower cost per delivery.
“Because we’re the market leader, we have a huge head start. In fact, in a lot of ways we can actually lock out competition by not allowing anybody else to get to saturation. Certainly, investors see that.”
And his mom? She came around. “Keith has a passion for helping other people,” she says. “I’m very proud of him.”
Six minutes after receiving the order for a quarter-ounce of Trainwreck, Alex pulls into the parking lot of an apartment complex in downtown Fullerton. He calls the customer because he doesn’t have a unit number. “This is Alex from Eaze,” he announces.
Two minutes later, the customer appears from an elevator. “That’s him, that’s the one in the picture,” Alex confirms. The man comes to the driver’s side window.
“It will be $75,” Alex tells him. The man hands Alex some cash. After counting the money, Alex hands him the paper bag.
Only nine minutes have passed since the delivery driver left the parking lot near Cal State Fullerton. He slogs back through the late afternoon traffic to his idling spot, where he waits for another order.