Outsmart Regulatory Barriers with Entrepreneurial Engagement

Less than a year ago, Canary, a mobile marketplace startup, was referred to as the “Uber for marijuana.” The company was founded to cater to medical marijuana patients who were not always in close proximity to a dispensary, or who had trouble getting around due to illness. Canary was also valuable to dispensaries, which benefitted from reaching more customers.

The startup was receiving press and building steam. MJINews spoke with Josiah Tullis, Canary’s co-founder, in February 2015 about the true value proposition the company brought to both dispensaries and patients alike, and although the company’s outlook was bright, even then there were regulatory concerns.

Fast-forward to April 2015, and Canary was closing its doors for good with the signing of Washington’s Senate Bill 5052, a bill that combines medical and recreational marijuana into one system. But behind the scenes, the company was already in a state of transition in anticipation of reaching a whole new set of cannabis users. Specifically, Tullis said, “We began looking at ways we could serve the recreational market with mobile apps and software.”

Thus, as Canary officially folded, the company reinvested to build mobile expertise through its new partnership with Dave, a mobile application that will allow consumers in both Washington and Colorado to place online reservations with cannabis retailers. Despite the rise in regulatory barriers with the passage of Senate Bill 5052, Canary was nimble enough to not only anticipate the new regulatory environment, but the company was prepared to thrive by servicing its new clientele.

The shift from working to serve medical marijuana patients to focusing on recreational users is something of a drastic shift. Although some companies cater to both, it seems the industry has a pretty clear divide. “The industry is [currently] more tightly regulated,” Tullis said of the recreational segment, “but it’s growing, and because we can reach all adult consumers, there’s a lot of opportunity.”

Although the original mission was to bring marijuana to patients, entrepreneurial drive led the team to this merger, epitomizing the resilience that is currently necessary to address needs in the current cannabis market. Further, the knowledge gained at Canary better positioned the team to offer top-line mobile solutions in this new capacity.

The basic value from a technology perspective seems quite similar, as the focus is still on easing the buying processes for both consumer and retailer. Despite the demographic shift, the Canary team is also leveraging experiences and expertise gained to better position Dave for future growth.

Active involvement in regulatory processes is Tullis’ recommendation for current startups in the industry. “Entrepreneurs are identifying problems and creating solutions to make things more painless, but without working with legislators, many of these solutions won’t see the light of day. We’ve learned this the hard way and now it’s our top priority to work with regulators to make sure our service is fully compliant … .”

The ability to successfully adapt is one thing, but it seems Canary is a shining example of what’s happening in the industry across the board—companies are learning that they must take an active role in the regulatory process. Entrepreneurs must be advocates of the cannabis industry and must take time not only to get to know the laws but also fight for what’s best for consumers and businesses. This active engagement is at the crux of not only an individual company’s success, but the success of the entire industry.

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