Investment IdeasNewsRetailTechnologyUSCannabis E-Commerce Startup Dutchie Raises US$15M From Big Name Backers

Oregon-based Dutchie already links 450 pot shops in 18 states with consumers, but now the startup has the likes of Snoop Dogg backing its e-commerce cannabis business.
Avatar David JSeptember 18, 20197 min

Finding investors for a startup can be a challenge, but Oregon-based Dutchie, a company that provides online cannabis ordering services, has some star power backing its business in only its first two years of operations.

In that short time, Dutchie claims 450 dispensaries across 18 states are paying the startup a monthly subscription fee to develop and maintain their websites, while it handles and tracks their orders that need to be ready for pick up. The company employs 36 people and it’s looking to cash in on the growing trend of marijuana delivery.

Dutchie finished raising $15 million last week in a round led by Gron Ventures, a new cannabis-focused venture fund, which saw some big names invest in the company. The list includes hip-hop mogul Snoop Dogg, NBA star Kevin Durant, as well as the founders of DoorDash and Jon Oringer, who is CEO and founder of Shutterstock.

Celebrity endorsements, venture launching and investment has become ubiquitous in the cannabis space and Snoop Dogg is at the forefront of this trend. The marijuana aficionado partnered with Canopy Growth Corp. (NYSE:CGC)(TSX:WEED) in the pot giant’s early days, and even connected lifestyle gura Martha Stewart with the company to develop CBD products.

Having Snoop Dogg in the mix will help bolster Dutchie’s reputation among cannabis enthusiasts in a hurry, but the company will also be able to tap his knowledge and experience in the industry.

Dutchie’s chief executive believes that having celebrity and successful entrepreneur investors on board will help further the company’s goals:

Scaling a company has its share of challenges, especially in an emerging new industry; however, having seasoned investors in our corner who can lend their experience and expertise will help us take Dutchie to the next level,” Dutchie CEO Ross Libson said in a release.

What makes Dutchie unique

Lipson has an entrepreneurial background and helped launch one of Canada’s first online food ordering service startups. But Lipson explained, in an interview with TechCrunch, that Dutchie is different than his previous food delivery services.

First off, Dutchie isn’t looking to grow pot or sell it. In fact, the CEO said it doesn’t provide the cannabis delivery services due to legal reasons and the dispensaries shoulder that load. The company makes its money by facilitated the orders in a smooth, streamlined fashion while charging the pot shops for its software services. Dutchie essentially becomes a middle man between the customer and the company, offering the technology to help coordinate delivery and pickup.

The company said it has reached US$140 million in annualized gross merchandise volume, but it doesn’t make a percentage on that base volume and only charges a flat rate.

The key selling point for investors is the simplicity behind the model, where consumers can search dispensaries in their area for products, make purchases online and then either have them delivered or go to pick them up. It’s a process that has similarities with DoorDash and other food delivery apps, and so it’s easy to see the potential appeal for the cannabis industry.

Connecting 450 pot shops with consumers is an impressive start for Dutchie. But it will be key for the company to get more dispensaries on board to make money, as the service is free for customers to use. For cannabis companies that don’t have the know-how to set it up a platform themselves, it can be an attractive option, especially for those servicing medical marijuana users that may lack mobility.

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