Online cannabis ordering website attracts big money

Published 9:30 am Tuesday, August 25, 2020

A Bend, Ore.-based cannabis e-commerce platform has secured $35 million in early-stage venture capital funding, the largest amount in Central Oregon.

Dutchie, a 3-year-old online cannabis ordering platform business, has already raised $18 million in capital from investors like Snoop Dogg’s Casa Verde Capital, Kevin Durant’s Thirty Five Ventures, Thrive Capital, Gron Ventures and Howard Schultz, founder and chairman of Starbucks Corp.

The new capital brings funding to $53 million and enabled the company to grow from five employees to more than 100 as it expands worldwide, providing a platform for legal dispensaries in 30 markets and 301 cities in the United States and Canada. Each day about 75,000 online orders are processed through Dutchie’s platform, according to the company’s statement.

As the recipient of the largest early-stage funding, Dutchie has put Bend on the venture capital map as a leader in startups, said Brian Vierra, Economic Development for Central Oregon venture catalyst.

“In today’s environment, it brings excellent job opportunities at a rapidly growing company that is a pioneer in its industry,” Vierra said.

The ability to attract venture capital like this is a big deal for the community, said Damon Runberg, Oregon Employment Department regional economist. Basically the venture capitalists are “betting” on Bend, Runberg said.

“There is energy behind these early state companies and an excitement about the work being done here in Central Oregon,” Runberg said. “Although the flow of venture capital tends to slow during recessions, Bend businesses are well-suited to continue receiving these investments as long as we remain an attractive destination for the lifestyle-driven workforce.”

COVID-19 has caused a surge in legal cannabis sales, which in turn sparked a need for online presence, said Ross Lipson, Dutchie’s CEO. Lipson and his brother, Zach Lipson, who is the company’s chief product officer, created Dutchie.

“There’s been a huge consumer shift from ordering in-store to ordering online,” Ross Lipson said. “We’ve seen our sales increase by 700% through the lockdown.

“And it doesn’t seem to be slowing down.”

Online ordering in any space — cannabis, grocery or restaurant — was $211.5 billion in the United States in the second quarter, an increase of 31.8% from the first quarter of 2020, according to new data from the Census Bureau.

Dutchie is one of several companies that specialize in online cannabis commerce. Dutchie charges a flat fee to provide a platform for cannabis retailers to sell products linked to their point of sale systems that keep track of inventory. Customers can drive to the store, have their orders delivered by another vendor, or do curbside pickup.

“Everyone is remote right now because of the pandemic,” Lipson said. “However, we have 102 employees and have a plan to double the team in the next year.”

The company is also planning to expand its office space into a larger space in District 2 in the NorthWest Crossing neighborhood of Bend.

“We have set lofty goals for the company. To execute them takes a large amount of capital,” Lipson said. “We want to build a team and innovate on the product to keep up with the needs of the dispensaries and the consumers. The cannabis space is unique, and it’s evolving.”

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