Unease at Eaze 

The cannabis-delivery platform lays off staff, replaces its CEO.

click to enlarge Shakeout in the industry.

Photo by Jamieaze-CC

Shakeout in the industry.

A month ago, I tried ordering a vape pen from several different East Bay delivery services. I wasn't out to review them, and it was hardly a scientific endeavor, so I'm not going to criticize any of them by name here. But the experience, until the very end, was downright infuriating. Eventually, Eaze, the San Francisco-based cannabis-delivery company, came to my rescue. But now, Eaze might be looking for somebody to rescue it.

I wanted a service that would allow me to easily place an order and pay with a credit card, so I limited my efforts to those that said they accepted plastic. In all, I attempted this with five different services. All but one of them was, in one way or another, a deal-killing hassle. Either the Web sites were unnavigable, or the site's policies were obscure, or basic product information was non-existent.

In two cases, there was no indication on product pages of how much THC or CBD the various pens contained. In another case, I went through the entire ordering process, entering my personal info, etc., before being told that someone would call me to take my payment info. That seemed weird, but the site assured me it would happen "soon." An hour passed, so I called them, only to learn that they served medical patients only. This crucial bit of information was not prominently displayed on the site, although I did later find it on the FAQ page.

Finally, I ordered through Eaze, a platform that allows distributors to sell directly to consumers, as Amazon does. And it went about as smoothly as buying stuff on Amazon does. The product menu was easy to navigate, policies were clearly stated, and product information was abundant. I entered my payment info and an hour or so later, a friendly gentleman was at my door with my pen. That's just how it should go, I thought, gratified that at least somebody knows how to do it right. I felt even better about the whole thing when the delivery guy told me how much better he liked his job than he did his previous one: driving for Uber.

So I was chagrinned last week to learn that Eaze was having trouble. Somebody in a cannabis-oriented Facebook group posted a link to an article by CannabisNow, a scoop by peripatetic journalist/entrepreneur (and occasional Express contibutor) Jimi Devine with a headline reading "Eaze Cuts Staff in Half as Chief Executive Steps Down." But, weirdly, there was no article at the link, which instead took readers straight to CannabisNow's home page.

I poked around a little and discovered a back-and-forth on Twitter between Devine and Elizabeth Ashford, Eaze's senior director of communications. "Pretty much nothing in this story is accurate as published," she tweeted at Devine. This complaint seemed to be the cause of the story being yanked from the site. Acutely curious, and assuming that maybe the whole story was false, I called Ashford. She repeated that the CannabisNow story was "totally inaccurate." It wasn't, I learned later. It did contain one substantial error: that the layoffs represented half of Eaze's staff. It was actually only about a fifth. But I didn't learn that from Ashford — she refused to tell me, beyond saying that the number of layoffs was "obviously much less than half." I tried to get more information on the situation at Eaze, but Ashford kept cutting me off when I tried to ask her questions. I did manage to get in a question about the reason for the layoffs: she cited the fact that "there's a lot going on in the cannabis market."

Indeed. But it's impossible to know which of the many things that are "going on" are responsible for Eaze's troubles, given that the company has raised $166 million in financing and is well-regarded. Could be low margins and competition. Could be the deeply challenging tax and regulatory burdens the industry faces (Eaze operates in California and Oregon). Could just be that the company's investors are demanding a higher return (or a smaller loss) than they're getting.

It's possible, though it seems unlikely, that the company's woes might be somehow related to a lawsuit against it filed by Herban Industries, a Santa Rosa-based outfit owned by the Canadian company DionyMed. The lawsuit accuses Eaze of hiding from credit-card companies the fact that it's selling cannabis, which the credit card companies generally don't allow. Herban alleges that this practice gives Eaze an unfair marketplace advantage over cash-only services. Eaze has responded that it doesn't handle payments itself, but leaves that to the individual sellers on its platform.

Eaze also gave no reason for the change in leadership. Its new CEO is Rogelio Choy, an Eaze executive promoted to replace Jim Patterson, who will stay on the company's board.

CannabisNow, meanwhile, replaced its disappeared article with one containing the accurate number of layoffs — 36, bringing the company's staff down to 135. The article does not include a correction or any indication that it had previously erred.

Altogether, this saga could serve as an object lesson: when companies (or media outlets) operate in good faith and with as much transparency as possible, things tend to go much more smoothly, even during rough times.

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