Cannabis, a favorite relaxation method of choice for some, has slowly become less stigmatized within the past few years.
After it became illegal in the United States through the Marihuana Tax Act of 1937, the business of selling cannabis went mostly underground. Not until 2004 did cannabis become legal for non-medical use in certain areas of the country.
Now that cannabis is recreationally legal in eight states and medically legal in another 19 states, it may not be too much longer until it’s legal through the entire United States. One company that’s looking to capitalize on the cannabis market is startup on-demand delivery company greenRush. We sat down with the company’s CEO, Paul Warshaw, to discuss how the company was formed, how it makes its revenue and its plans for down the road.
PYMNTS: What’s the story behind how greenRush started?
PW: The founders have extensive tech and marketing experience from their previous businesses in the event and entertainment space. One of their biggest ventures was an online platform aggregating New Years Eve parties across the globe. Through highly technical SEO expertise and digital marketing, they became the largest player in that space.
At the suggestion of a mutual friend and business partner, the founders started researching the industry, finding that there were serious tech and marketing gaps to be filled. For consumers, accessibility and lack of information are significant barriers to purchasing cannabis. It is often hard to find and search for local retailers, exacerbated by the fact that cannabis businesses are oftentimes located in undesirable areas.
For the retailer, there are real technological barriers: Most retailers have limited technology experience — even the more sophisticated operators — and many do not have even basic websites. Their menus are out of date, and they rarely provide seamless user verification, online ordering and tracking functionality.
greenRush’s founders are bringing their expertise in building successful technology and marketing platforms to the cannabis industry to solve exactly these problems. The vision for greenRush is to build a ubiquitous platform, allowing consumers to order cannabis on demand from any location of their choosing across every legal cannabis market in the world.
PYMNTS: In your own words, what is greenRush about?
PW: The greenRush platform is the easiest way to purchase cannabis. We are the “Amazon” of Cannabis, the largest online marketplace in the world. greenRush’s web and mobile platform reaches tens of thousands of consumers, allowing them to access hundreds of retailers and over 20,000 products across hundreds of cities in California, Nevada and Colorado.
PYMNTS: How does the pricing model work, and how does greenRush get paid?
PW: greenRush has multiple business lines that drive revenue, all of which transform relationships between brands, dispensaries and customers.
Our main source of revenue is through the greenRush.com platform. This is the marketplace that connects patients with retailers. We charge a fee for every transaction that occurs on the marketplace. We only win when our retail partners are receiving orders and growing their business. This model strengthens synergistic incentives between us and our partners.
Another source of revenue is through our white-label “business in a box” solution: greenLabel. It’s a customized and dynamic cannabis ordering platform for dispensary and retail partners. greenLabel allows retailers to build strong online footprints and process orders online with enterprise-level functionality.
Additional, burgeoning sources of revenue are technology and marketing solutions for cannabis brands. As brands continue to grow and develop stronger cache with the maturation of the industry, we’re developing cutting edge eCommerce solutions tailored to them.
PYMNTS: Who does greenRush see as its competition?
PW: greenRush is leading the pack in so many verticals — we really are a step ahead in not only the sophistication of our technology, but even more importantly, the vigor of our strategy. There are so many great technology offerings in cannabis that assist retailers: point of sale systems, driver tracking, inventory management, etc. — but with our restful API, we’re able to integrate with the best in breed for each category, allowing each dispensary access to the best technology available for every aspect of their business.
PYMNTS: Since its inception, how much has greenRush grown year over year? Does it have any future projections for where it hopes to grow within the next few years?
PW: Our monthly growth has been strong. This past year, we’ve grown an average of 28 percent a month. Our customers are loyal and our platform is sticky. We see over 80 percent of customers returning to the platform to order, some 4x, some dozens. Our retention is strong. This year, we’re on track to process nearly $9 million of sales through the greenRush platform.
PYMNTS: How many rounds of funding has greenRush received?
PW: greenRush was primarily funded by the founders and a small financing round of friends and family. We launched our Series A fundraising cycle at the beginning of April and are making solid progress.
PYMNTS: What does the term “Uber of X” mean to you, and how does greenRush fit that mold?
PW: greenRush is disrupting the industry by bringing an Amazon-style on-demand marketplace to cannabis. For consumers, we’re bringing them choice, convenience and discretion. For retailers, we’re bringing them technology, consumer reach, and promotion. The entire greenRush team is passionate about the on-demand economy and how people’s behavior has changed with the rise of Uber, Amazon, GrubHub, etc. We have built the solutions to meet consumers where they want to order cannabis — whether it’s through the greenRush platform, directly through a retailer website, by searching for a brand, or through a greenRush affiliate. Consumers get what they want, when they want it, in as few clicks as possible.
PYMNTS: As most startups have their fair share of hiccups, can you share a few lessons-learned anecdotes?
PW: Just like every startup, we had a good amount of lessons learned. We’re a highly analytical company, and nearly all of our decisions are based on data, which has kept us focused and strategic. We’ve gotten much better at not veering away from our core mission: to be the largest cannabis marketplace in the world.
PYMNTS: What are greenRush’s 2017 goals?
PW: We have aggressive 2017 goals — we’re laser-focused on territory expansion and acquiring consumers and retailers. In the next few weeks, we’re expanding to Los Angeles. Measure M was passed earlier this month allowing ordering and delivery platforms to operate in and around the LA region. We recently launched in Las Vegas and are well on our way to being the largest ordering platform in that market.
credit:420intel.com