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Thursday, Mar 28, 2024

Lighting Fire Under Pot

Need a cannabis card? Speed Weed can help. The Woodland Hills company has built a business on delivering medical marijuana to customers at their homes. Now it’s looking to expand its services by helping customers get medical authorization to buy the pot in the first place. The company announced last month a partnership with HelloMD, an online telehealth company for the cannabis industry based in San Francisco. The partnership allows Speed Weed to connect potential customers to HelloMD’s platform, where they can meet with doctors through online video and get a recommendation, or cannabis card, to buy medical marijuana. “Getting a doctor’s recommendation can be a bit of a process,” said Jennifer Gentile, Speed Weed’s chief operations officer. “You go (into a storefront) and you’re sitting around with a bunch of other people, waiting to get a recommendation. It doesn’t feel like a very private or medical experience. For us, HelloMD was a natural fit because they provide the same kind of privacy that we provide.” For its part, HelloMD has about 10 doctors available to provide the recommendations at any time. Customers can connect through a computer, tablet or smartphone. “It’s an additional health care platform for cannabis patients, a complete online service,” said Mark Hadfield, chief executive of HelloMD. “The doctors we work with are typically retired or semi-retired and want to work from home. We do a background check to make sure there are no issues and that their licenses are current.” Still, some experts wonder whether video consults, rather than in-person visits, will be enough to accurately gauge a medical need for marijuana. Gov. Jerry Brown recently signed legislation to further regulate legal cannabis businesses in California, and it’s unclear whether this business model will hold up once those new rules take effect. “There are a lot of nuanced issues here that people are going to have to look into,” said Marc Ross, founding attorney at Sichenzia Ross Friedman Ference in New York. Modern gold rush The cannabis industry is growing fast and startups continue to pop up as entrepreneurs work to capitalize on a modern-day gold rush. According to ArcView Market Research, a San Francisco research firm that follows the medical marijuana markets, the legal cannabis market grew by 74 percent in 2014 to $2.7 billion, compared with $1.5 billion the previous year. The ArcView report also states that there are 1.5 million purchasers of medical marijuana, interesting being that marijuana is still illegal under federal law. Though there are 23 states that have legalized the use of pot in some form, regulations vary from state to state and are often rather convoluted. It’s for this reason that many medical professionals steer clear of the industry, and those that do get involved do so with limited interaction. To give the OK for a patient to receive a cannabis card, doctors can only “recommend” medical marijuana, they cannot prescribe it; a formal prescription would violate federal rules for controlled substances. Ross, who is also an adjunct professor at Hofstra University’s school of law in New York, where he teaches a course on business and marijuana law, said the federal government will soon have to address the issue. “It’s going to be a lot like gay marriage, where the states are going to lead the push to make it legal federally,” he said. “People are recognizing that marijuana is a valid medicine that ought to be available for doctors to recommend. You’re also seeing that it is becoming more legitimized and being treated as a bona fide medicine.” The California Legislature last month passed a series of bills to regulate the medical cannabis industry. The rules will be enforced by a new agency called the Bureau of Medical Marijuana Regulation, which will fall within the Department of Consumer Affairs. The bureau will outline rules for the industry by 2017, and they will go into effect January 2018, at which point businesses will be required to apply for state licenses. Speed Weed said it is working very closely with its lawyers to ensure that all state laws are being followed. “And we will continue to do so,” Gentile said. The pot delivery service hopes the HelloMD deal will snag customers who aren’t comfortable visiting dispensaries. She said the process can include sketchy neighborhoods, long lines and a lack of privacy, all of which may not appeal to older customers. With HelloMD, such customers can get a medical recommendation online for $49. That money goes directly to HelloMD. For Speed Weed, the payoff is a new customer. As an incentive, the company offers a $50 discount to every customer who uses the video chat for a recommendation. The discount is applied over three separate purchases of marijuana. Speed Weed founder AJ Gentile, Jennifer’s husband, said since launching the HelloMD service last month, there has been a 10 percent increase in traffic to Speed Weed’s website. The company typically averages 400 to 500 new customers a month, and since its launch HelloMD accounts for 120 of those customers. “We’ve been live for about four weeks and the response has exceeded expectations,” he said. “It’s so elegant to me, I don’t see how anyone would use anything else.” Speed Weed was founded in 2012 and has roughly 60 employees, the majority of whom are drivers. They use their personal vehicles to deliver to customers within 45 minutes for orders between $60 and $100. Speed Weed generated $2.5 million in revenue last year, said AJ Gentile, and this year he anticipates doubling that. The company has more than 26,000 customers on file. “We are profitable, though the margins are very small,” he said. “For every dollar we take in, about 70 cents has to go to some state or local federal agency. Cannabis businesses don’t have tax deductions like every other business.” With its growth, Speed Weed plans to relocate its main office to Hollywood Hills, though it will continue working out of its Valley offices as business expands. And AJ Gentile expects the HelloMD arrangement will accelerate that growth. “This is the future of doctor recommendations,” he said. “It’s really an impressive system. Mark and his team have really done a fantastic job heading this up and our patients have been responding so positively.”

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