INSUBCONTINENT EXCLUSIVE:
Ross Lipson comes from an entrepreneurial family, so perhaps it’s no wonder that as a college student, he dropped out of school to jump
into the online food space, including co-founding, then selling, one of Canada’s first online food ordering service startups.It’s even
less surprising that having gone through that experience, Lipson would use what he learned in the service of another startup: Dutchie, a
two-year-old, 36-person, Bend, Ore.-based startup whose software is used by a growing number of cannabis dispensaries that pay the startup a
monthly subscription fee to create and maintain their websites, as well as to accept orders and track what needs to be ready for pickup.The
decision is looking like a smart one right now
Dutchie says it’s now being used by 450 dispensaries across 18 states and that it’s seeing $140 million in gross merchandise volume
The company also just locked down $15 million in Series A funding led by Gron Ventures, a new cannabis-focused venture fund with at least
Other participants in the round include earlier backers Casa Verde Capital, Thirty Five Ventures (founded by NBA star Kevin Durant and
sports agent Rich Kleiman), Sinai Ventures and individual investors, including Shutterstock founder and CEO Jon Oringer.Altogether, Dutchie
(named after the song), has now raised $18 million
We talked earlier today with Lipson about the company, its challenges and working with his big brother Zach, himself a serial entrepreneur
who co-founded Dutchie and today serves as its chief product officer while Ross serves as CEO.TC: It’s so interesting when siblings team
Did you always get along with your brother?RL: We complement each other strongly
I’m energy, I’m sales and business development
I’m fast-moving by nature and the guy who wants to drive the car as fast as possible
Zach is the one who wants to make sure that we’re doing everything right
We really do understand each other quite well and appreciate each other’s strengths and weaknesses, which enables us to meet in the middle
on a lot of things.TC: It’s also interesting that you’ve both been founders beginning around the time you were in college
Were your parents entrepreneurs?RL: Our father is a founder and has run his own business for the last 35 years
Our parents also always pitched us that anything is possible and encouraged us to go for it
He was the dreamer and our mom was the cheerleader, which is a pretty nice combination.TC: You started Dutchie a couple of years ago
Is running this startup more or less challenging than your experience in the food delivery business?RL: It’s our second year in business,
and we’ve seen some explosive, unprecedented growth
As for whether it’s harder or easier than food, we’re very product and user-centric, and by that we mean consumers but also dispensaries
We’re focused on the customer all day, every day, with a team that ensures that they have support, that they receive their orders, that
the orders are out the door quickly or at least, ready for pickup
We make sure the photos work, that different potencies are marked
Our system is kind of like a Shopify of the cannabis space maybe meets DoorDash.TC: You don’t deliver, though.RL: No
We don’t do delivery for legal reasons; the dispensaries [handle this piece].TC: You’re charging like other software-as-service
Do you also take a cut of each sale?RL: We don’t charge on transaction volume.TC: You’re working with 450 dispensaries
Is there any way to know what percentage of the overall market that is, and how much is left for you to chase after?RL: First, there are
more than 30 states where cannabis is either medically legal or that have legalized the recreational use of marijuana and we operate in both
It’s hard to know the actual count [of dispensaries], because they are always being formed, getting acquired or going out of business, but
counting registered dispensaries, we work with more than 15% of them right now.TC: Who are your biggest competitors? Eaze? Leafly? They also
help consumers find cannabis and, in Eaze’s case, deliver it, too.RL: Eaze is more focused on delivery where we’re more focused on
It’s also only available in California and Oregon, whereas we’re in 18 states
They educate the consumer about online ordering, which is great, but they also own the consumer experience, where we’re really powering
the dispensary.Leafly and Weedmaps are really different types of platforms; they’re mostly known for their dispensary and strain reviews,
where we’re strictly an online ordering service.TC: You’ve raised a big Series A for a company in the cannabis space
Do you have concerns about there being later-stage funding available when you need it?RL: It’s true the most investors still haven’t
touched cannabis, though you are seeing bigger deals
Thrive Capital led that [$35 million] round in [the online cannabis inventory and ordering platform] LeafLink [last month]
You saw Tiger Global [lead a $17 million round ] in [the software platform for cannabis dispensaries] Green Bits last summer
It’s a big advantage to the funds that can right now invest because there are these barriers to entry; they’re finding deals that are
promising and they can get in early and without competition.Pictured, left to right, above: Ross and Zach Lipson
